A decree that reshapes IGIC, AIEM and fuel taxation
The Canary Islands Government has published Decree-Law 5/2026, of 27 July, introducing a set of tax measures that enter into force on 15 August 2026 (some provisions apply retroactively from 1 January 2026). The rule touches several regional and transferred taxes: IGIC (the Canary Islands’ equivalent of VAT), AIEM (the local production and import tax), the special tax on petroleum-derived fuels, the fiscal levy on petrol and diesel for vehicles, and Transfer Tax and Stamp Duty (ITPAJD).
The most significant IGIC change settles a question that had been unsettling energy-sector businesses for some time: it is now confirmed, with effect from 1 January 2026, that supplies and imports of petroleum and petroleum-refining products are taxed at the specific 1% rate, even when blended with biofuels. This removes the wording that had left open the possibility that a 3% rate still applied to certain products. In parallel, AIEM is adjusted so the tax rate is identical whether the goods are imported or supplied domestically.
Biofuels and CO₂: changes with a direct impact on distributors and importers
If your business distributes or imports fuel in the Canary Islands, two changes are worth watching. First, supplies of biofuels blended with petrol or diesel -including hydrogenated vegetable oil (HVO)- will now be taxed, under both the regional special tax and the vehicle-fuel levy, at the same rate applied to “pure” petrol and diesel. This closes a gap that had created uncertainty over how blended fuels should be treated, and standardises the tax treatment of the whole product sold to the public.
Second, on a temporary basis (until 31 March 2027), a zero AIEM rate is introduced for imports of carbon dioxide (CO₂). This is a targeted measure: it responds to the halt in local CO₂ production, which has forced Canary Islands industries that rely on it -food and beverage, healthcare, among others- to cover their demand through imports. If your activity depends on this input, it’s a short-term tax relief worth taking advantage of while it lasts.
A better deal for mutual guarantee societies (and anyone using one to secure financing)
The Decree-Law also fixes a requirement the Constitutional Court had found hard to justify: until now, to apply the reduced 0.1% Stamp Duty rate to deeds creating or cancelling guarantees in favour of a mutual guarantee society (sociedad de garantía recíproca, or SGR), that society had to be domiciled in the Canary Islands. That requirement is now removed. In practice, this widens the range of SGRs a Canary Islands company can work with without losing the tax benefit on the deed that formalises the guarantee – potentially opening up more options and better terms when securing financing.
These are technical changes, but their consequences are very concrete depending on your sector: energy, transport, CO₂-intensive industry, or companies that rely on a mutual guarantee society to secure financing. If any of these measures affects your business, EBF can review the specific impact with you and flag any adjustment opportunities the new rule opens up. Get in touch and we’ll look at it together.