Local trade associations and the Regional Ministry of Economy look for solutions to what they describe as “unequal competition” caused by online platforms exempt from IGIC on orders up to €150.
A Changing Marketplace
Consumer habits are shifting rapidly, and the consequences are deeply felt in the Canary Islands. A new study from the Canary Islands Observatory for Telecommunications and the Information Society, under the Agency for Research, Innovation, and the Information Society, confirms that local companies already demonstrate a high level of basic digitalization and have a consolidated presence in e-commerce. Yet, despite this adaptation, the competitive imbalance persists.
The Chamber of Commerce of Santa Cruz de Tenerife points to online trade as a key factor behind store closures, even before the pandemic, largely due to the tax exemption on low-value imports. Under current rules, purchases from outside the islands up to €150 are free from IGIC (Canary Islands General Indirect Tax). This, they argue, creates a gateway for products that compete on unequal terms with local shops.
The Double Disadvantage for Consumers
On the other side of the counter, consumers also feel the impact. According to a study by the price comparison platform Idealo, 54% of online stores do not deliver to the Canary Islands at all. Of those that do, only 13% offer delivery without extra shipping surcharges.
Round Table for Solutions
To address this imbalance, the Regional Ministry of Economy and the employers’ association Cecapyme (representing small and medium-sized businesses) have launched a round table with business and government representatives.
- David Mille, Director General of Trade and Consumer Affairs, explained that initial proposals have been heard and the Canary Islands Tax Agency outlined its main lines of action.
- Participants will reconvene soon, with updates from the Directorate General for Relations with EU Institutions and the ATC, aiming to create a mechanism accepted by major online platforms that would allow remittances for IGIC settlement at source.
Regional Vice President Manuel Domínguez has floated alternative solutions: exempting Canary Islands stores from IGIC altogether, or increasing transport subsidies.
E-Commerce in Numbers
- Turnover in 2023: €3.54 billion.
- Price profile: 75% of online purchases fall under the €150 exemption threshold.
Voices from the Sector
- Abbas Moujir, president of the Federation of Urban Areas of the Canary Islands (Fauca), criticised the current system:
“The product is usually of lower quality than that found in high street shops. We have been calling for identical conditions for the entire sector. We generate employment (around 160,000 jobs), we pay taxes, we create wealth, and it turns out that outsiders enjoy tax benefits, with money that doesn’t stay here.” - Alfredo Medina, secretary general of the Canary Islands Association of Medium and Large Distribution Companies (Asodiscan), added:
“E-commerce platforms are increasingly present and causing more damage. The Canary Islands are the only place in the EU where purchases under €150 are tax-free, and they exploit this at the expense of traditional commerce.”
Strong Sales, But Closures Continue
The Canary Islands Trade Observatory, in coordination with the National Statistics Institute (INE), reports that retail turnover rose to 129.67 points — a 9.4% monthly increase and the strongest rebound of 2025. Year-on-year growth reached 5.2%, slower than June’s 7.3% but still above the national average.
However, this “good performance” has not prevented the closure of shops. Challenges include:
- Weak generational succession in family businesses.
- Rising structural costs linked to insularity (transport, electricity, rents, salaries).
- A burdensome administrative framework.
To counter this, the regional government and trade bodies are promoting Dual Vocational Training as a tool to modernize business activity and address youth unemployment, with the aim of creating a “favorable environment” for local commerce.
