The tax structure underpinning the Canary Islands' economy faces an unprecedented institutional challenge. The Association of State Tax Inspectors (IHE) issued a stark warning on Monday: any attempt to displace the Tax Agency (AEAT) in managing the Canary Islands Investment Reserve (RIC) and the Investment Deduction (DIC) is playing with fire in the eyes of the European Union.
The controversy stems from the proposal to transfer the control and review functions for these incentives to the Canary Islands Tax Administration (ATC). For the inspectors, this move is not a simple administrative redistribution, but rather an attack on the very foundation of the Economic and Fiscal Regime (REF), the lifeline that allows the tourism sector in southern Gran Canaria to reinvest its profits with a reduced tax burden.
The crux of the conflict lies in the nature of the REF (Special Economic Regime). Unlike quota systems or ceded taxes, the Canary Islands' tax advantages operate as an exception authorized by Brussels within the general state tax system. Inspectors emphasize that "removing the state" from the management of Corporate Income Tax and Personal Income Tax would create a technical dysfunction that could lead the European Commission to question the legality of these incentives as state aid.
For the tourism entrepreneur in San Bartolomé de Tirajana, this bureaucratic battle translates into a potential loss of legal certainty. If the Tax Agency loses its inspection powers to the regional government, the risk increases that Brussels will perceive the REF (Special Economic Zone) as an opaque or arbitrary system, jeopardizing the survival of a tool that allows businesses to allocate up to 90% of undistributed net profits for new investments.
The management of the RIC (Reserve for Investment in the Canary Islands) is the driving force behind the renewal of accommodation facilities in areas like Meloneras and Playa del Inglés. The regional government's desire to participate in the "development and monitoring" of the REF (Special Economic Zone) clashes head-on with the centralized view of the tax inspectors, who see the AEAT (Spanish Tax Agency) as the sole guarantor of "fairness among citizens from different regions."
The president of the group, Ana de la Herrán, has been emphatic: the REF (Special Economic Regime) is not an independent system, but rather a "lower tax burden" within the national framework. In a context where the sustainability of tourism is under scrutiny, opening a loophole in the Canary Islands' tax system could trigger a chain reaction. The underlying fear is that, in the attempt to gain fiscal sovereignty, the islands will end up losing the protection of a national framework that, until now, has served as a shield against the reluctance of other EU member states toward special tax regimes.
