Accounting services for expats in Tenerife

Professional tax and accounting support for residents, non-residents, freelancers and businesses operating in Tenerife and across the Canary Islands.

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Accountancy support in Tenerife: navigating Canary Islands tax rules

Tenerife is not just another Spanish location. As part of the Canary Islands, it operates under a distinct tax regime that differs from mainland Spain in several important ways.

The most significant difference is indirect taxation. The Canary Islands use IGIC (Impuesto General Indirecto Canario) instead of IVA (VAT). IGIC rates are generally lower, but compliance requirements still apply and are frequently misunderstood by expats and business owners.

Tenerife is home to over 150,000 foreign residents, with strong British, German, Italian and Scandinavian communities, particularly in, Costa Adeje, Los Cristianos, Playa de las Américas, Puerto de la Cruz, Santa Cruz de Tenerife.

Many residents run businesses, own rental properties, or earn income from abroad. Common areas of confusion include:

IGIC versus IVA registration
• Spanish tax residency status
• Non-resident property obligations
• Holiday rental licensing compliance
• Cross-border income reporting
• ZEC eligibility

Baleario provides specialist accounting services in Tenerife for individuals, autónomos and SL companies. We ensure compliance with both Spanish national law and Canary Islands tax regulations, working clearly in English and Spanish.

Canary Islands tax advantages: what makes Tenerife different?

The Canary Islands operate under the REF (Régimen Económico y Fiscal), a special economic and tax framework designed to stimulate economic activity.

Key differences compared to mainland Spain include:

IGIC instead of IVA (lower indirect tax rates)
• Potential reduced corporate tax under ZEC (Zona Especial Canaria)
• Investment incentives under REF
• Different import and customs treatment
• Specific regional deductions and allowances

For entrepreneurs and internationally mobile professionals, this creates genuine planning opportunities, but only when structured correctly from the outset.

Tenerife, particularly Santa Cruz and certain commercial zones, is an established base for ZEC-registered companies and international trading entities. We advise clients on whether a standard SL structure or ZEC registration is appropriate for their situation.

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Client testimonials

Tenerife tax snapshot

Before going deeper, here is a clear overview:

Indirect tax: IGIC (not IVA/VAT)
Corporate tax: 25% nationally (potential reductions under ZEC)
Personal income tax (IRPF): National rates apply
Non-resident income tax: Modelo 210 required
Wealth tax: National rules apply
Customs treatment: Different from mainland Spain

Understanding these differences is essential before relocating, investing, or setting up a business.

Tax residency in Tenerife: what changes and what doesn’t

Living in Tenerife does not change how Spanish income tax works.

If you become tax resident in Spain, you are taxed on your worldwide income, even if you live in the Canary Islands.

Spanish tax residency is typically triggered by:

Spending more than 183 days in Spain
• Having your centre of economic interest in Spain
• Family ties located in Spain

What does change in Tenerife is:

The indirect tax system (IGIC)
• Business incentives under REF
• Potential access to ZEC reduced corporate tax

Clear residency assessment is always the first step before filing or structuring.

Digital nomads and remote professionals in Tenerife

Tenerife has become a major hub for digital nomads and remote workers, particularly in the south of the island.

Common issues we see include:

Foreign employer income not declared correctly
• Incorrect assumptions about residency
• Permanent establishment risks
• IGIC registration errors
• Social security coordination problems

Living in Tenerife while working remotely for a foreign company can trigger Spanish tax obligations sooner than many expect.

We assess:

Days spent in Spain
• Nature of employment contracts
• Location of clients
• Economic ties
• Business structure

Proper structuring at the beginning prevents significant long-term complications.

Holiday homes and non-resident tax obligations in Tenerife

Many expats own second homes in:

Costa Adeje
• Los Cristianos
• Playa de las Américas
• Puerto de la Cruz
• Callao Salvaje

If you are non-resident and own property in Tenerife, you must usually file:

Annual non-resident income tax (even if not rented)
• Quarterly returns if rental income is generated

Tourist rentals must also comply with Canary Islands licensing regulations. Failure to comply can result in fines and suspension of rental activity.

We regularly assist clients with corrective filings and late submissions where required.

Import rules and moving to Tenerife

The Canary Islands are outside the EU VAT area. This affects:

Importing vehicles
• Shipping household goods
• Purchasing goods from mainland Spain
• E-commerce transactions
• Commercial imports

IGIC applies instead of IVA, and customs rules differ significantly. Many expats only discover this after they move. Planning before relocation avoids unexpected costs.

Who we typically support in Tenerife

Our Tenerife clients commonly include:

Retirees relocating permanently
• Holiday home owners
• Short-term rental investors
• ZEC company founders
• Tourism and hospitality operators
• Digital and tech professionals
• Consultants and remote workers
• Cross-border professionals with UK or EU income

Each profile carries different compliance risks. We tailor our approach accordingly.

Accounting services for expats and businesses in Tenerife

We provide structured, compliant accounting and tax support for individuals, property owners, freelancers and companies operating in Tenerife.

Private tax services in Tenerife

We support residents and non-residents with:

Spanish income tax returns (IRPF)
• Non-resident income tax (Modelo 210)
• Wealth tax planning
• Inheritance and succession tax
• Cross-border income reporting
• Property-related tax compliance

Common scenarios include:

UK pension holders relocating to Tenerife
• German residents with overseas investments
• Property owners generating rental income
• Remote professionals earning foreign income

We confirm residency status before filing.

Autónomo accounting services in Tenerife

Self-employment is common in Tenerife, particularly in tourism, hospitality, consulting and remote services.

Autónomos must manage:

Quarterly IGIC returns
• Quarterly income tax payments
• Social security contributions
• Annual declarations

Our services include:

Autónomo registration
• IGIC compliance and reporting
• Bookkeeping and invoicing
• Expense tracking
• Tax planning

We ensure you understand the difference between mainland VAT and Canary Islands IGIC.

SL company accounting in Tenerife

Operating a company in Tenerife requires structured accounting and compliance.

We support SL companies with:

IGIC reporting
• Corporate tax compliance
• Payroll and social security
• Annual accounts
• Ongoing bookkeeping

For qualifying businesses, we advise on ZEC registration and REF incentives.

Typical tax deadlines we manage

Personal income tax (IRPF)
Filed annually between April and June

Autónomo quarterly filings
January 20
April 20
July 20
October 20

Non-resident income tax
Annual filing for non-rented property
Quarterly if rented

Corporate tax
Within 25 days after six months from the financial year-end

We track deadlines and provide advance reminders.

Transparent pricing

Our services typically start from:

Private tax services

From €20 per month

Autónomo accounting

From €80 per month

SL company accounting

From €150 per month
Final pricing depends on reporting complexity and business structure.

Holded accounting software

We use modern cloud-based accounting tools to ensure transparency and efficiency.

Baleario is a Holded partner, allowing us to manage:

IGIC reporting
• Invoicing
• Bookkeeping
• Real-time financial visibility
• Structured compliance documentation

Clients benefit from clarity and streamlined reporting.

Why choose Baleario in Tenerife

Baleario insight: common tax problems in Tenerife

“Many expats assume that living in Tenerife means lower tax and simpler rules. In reality, the difference between IGIC and IVA creates frequent errors, particularly for business owners.

We regularly see missed non-resident filings, incorrect IGIC registrations, and misunderstandings around tax residency. The most successful clients are those who establish proper structures from the beginning rather than correcting problems later.”

Chad Harwood-Jones, Founder, Baleario

Professional accreditation and official collaboration

AECE accredited membership

Our accountants are members of the Spanish Association for Accountants and Tax Consultants (AECE).

Agencia Tributaria collaboration

We work directly with Spain’s national tax authority systems to ensure accurate filings and current compliance.

FAQs – Accounting services in Tenerife

Is IGIC the same as VAT?

No. IGIC replaces VAT in the Canary Islands. Rates are generally lower, but filing obligations still apply.

Do I pay Spanish income tax if I live in Tenerife?

If you are tax resident in Spain, you are taxed on worldwide income. Non-residents are taxed only on Spanish-source income.

I own a holiday home in Costa Adeje but do not rent it. Do I still file tax?

Yes. Non-resident owners must usually file annual non-resident income tax.

Can I benefit from reduced corporate tax in Tenerife?

Possibly. The ZEC regime offers reduced corporate tax rates for qualifying businesses. We assess eligibility before structuring.

Do you provide services in English?

Yes. All services are delivered in English and Spanish.

Speak to an English-speaking accountant in Tenerife

Get clear advice on IGIC, ZEC eligibility, tax residency, non-resident filings and business compliance in the Canary Islands.

Book a consultation and take control of your finances in Tenerife.