Canary Island IGIC Tax on Airbnb Rental Income

[Kathleen1105]

Hi,

We let our property in Lanzarote through Airbnb. Until 2025 we did not have to register and account for IGIC (tax @ 7%) on our rental income in Lanzarote because the total annual amount was below the exemption limit of €30,000.  From January 2025 the Canary Island authorities did away with the exemption limit for rental income and we have to account for IGIC on our rental income.  My question is "what is the correct amount of "rental income" to be used when calculating the 7% Output IGIC?" Specifically, should the "rental income" include or exclude the "Host service fee" that is deducted by Airbnb before they pay the rental income into our bank account.  For example if a guest pays Airbnb €1,080.00 plus a Guest service fee of €182.96, then we receive €1,041.13 (€1,080.00 less Host service fee of €38.87 (3% plus EU VAT @20%].  So - is the correct amount for calculating 7% IGIC €1,041.13 or €1,080.00?  If anyone has received advice on this from the tax authorities in the Canaries or from a local tax adviser please could they share this.

(The figures above only refer to the Output IGIC. Input IGIC on allowable invoices has to be deducted to arrive at the net amount of IGIC to be paid over in each quarter.  In other countries that operate VAT systems the Host service fee would be regarded as a "reverse charge" item to be included on both the output and the input sides of the VAT return but I don't know if the Canary Island rules do this?)

I'd welcome any ideas from members who have tackled this problem. Regards, Kathleen & Philip

[Paula]

Hello @Kathleen1105 , welcome to the Airbnb Community Center 😊

Thank you for bringing this topic to our Community Center. I am reaching out to one of our experienced Hosts in Spain, @Daniel1651, to see if he can share some ideas with you.

Additionally, you can find related conversations by typing keywords in the search bar at the top of the community page. This will bring up similar past discussions from our Hosts.

I hope this helps 🌻

[Stan2402]

Hello Paula ,

could you figger already out how this works for the canarias ? Thx a lot and have a wonderful day 

[Giulio361]

Hi @Kathleen1105 

Could you find the answer to your question? I am also very interested in this topic. Thanks and happy holidays, 

Giulio

[Lisa8872]

Hi @Kathleen1105 , I was reading your post in relation to IGIC tax.  We have a property in Tenerife.  Did you manage to allocate the 7% IGIC tax on Airbnb portal? I have been looking at other listings and do not see this being charged to guests and interested to know as our accountant has said it should show the IGIC tax at 7% on the guests invoice which we can offset? Any help would be appreciated. Best wishes Tim&Lisa 

[Hello6]

 if the taxable person receives service invoices from professionals not resident in the Canary Islands, the taxable person is obliged to pay IGIC on behalf of this professional. This is called the reverse charge and, in general, has no impact as a deducted and a passed-on IGIC are declared simultaneously, with the final result being zero. This is what happens with platforms that send us clients (e.g., Airbnb or Booking). These platforms are generally located outside the Canary Islands, and the operation is as follows:

    We receive the net amount from the clients they have sent us in our bank account, deducting the commission. Example: the net amount deposited in the bank is €100. The total sales are €120. Commission for services provided: €20.

    We must declare €120 as sales and pay IGIC of €7.85 (€120 / 1.07), since the sale already includes IGIC.

    Apply the reverse charge for an amount of €0.57 (on the €20 commission).  https://www.caamano-asesores.com/post/legal-and-fiscal-obligations-for-holiday-rentals-in-the-canary...

[Hello6]

Good Luck @Kathleen1105 and all hosts in the Canary Islands post-2025 new new IGIC registrado regime!  🙂☘️