EUTaxThe problem: Shopify does not know what IGIC is
IGIC is the Canary Islands' indirect tax. The islands sit outside the EU VAT area. Shopify calculates tax per country and, according to Shopify's own forum moderators, does not allow different rates inside one country, so it cannot charge 7 % IGIC to a Las Palmas address and 21 % VAT to a Madrid address. In our tests, with Shopify Tax enabled, a Canary Islands address was charged no VAT, but no IGIC either.
What applies depends on where your store is
- Store based in the Canary Islands selling to Canary Islands customers: you normally charge IGIC instead of VAT. The general rate is 7 %; some products have other rates.
- Store on the Spanish mainland shipping to the Canary Islands: deliveries to the islands are usually VAT-exempt, and the buyer pays IGIC at customs on arrival. It helps to record the exemption on the order.
Confirm your case with your tax advisor.
How to charge IGIC on Shopify, step by step
- Recognise Canary Islands addresses by postal code: 35xxx (Las Palmas) and 38xxx (Santa Cruz de Tenerife).
- Add a tax line under each product. With the EUTax app this is the "Canary Islands with IGIC 7 %" template: it shows as "Zone tax · IGIC 7 %" at checkout and on the order.
- Check whether your prices include tax. If they do, the app splits the price into base plus IGIC and the total does not change.
- Avoid mixed zones. If billing and shipping are in different zones, checkout is blocked with a message in the buyer's language.
- Place a test order with a Las Palmas address and check the breakdown.
The app does not issue invoices. Ask your advisor how to invoice.
FAQ
Does Shopify charge IGIC natively?
No. Shopify cannot set different tax rates inside one country, so it cannot charge IGIC to the Canary Islands and VAT to the rest of Spain. You need an app or a custom solution.
What is the general IGIC rate?
The general IGIC rate is 7 %. Other products have other rates, so check yours with your advisor.
Do I need Shopify Plus to charge IGIC?
No. EUTax works on every Shopify plan.
Which postal codes are in the Canary Islands?
Those starting with 35 (Las Palmas) and 38 (Santa Cruz de Tenerife).
Does the app issue invoices with IGIC?
No. EUTax changes the cart and order lines but does not issue invoices.
This guide is informational and is not tax advice. Rates and rules can change: confirm them with your tax advisor or the Canary Islands Tax Agency.