The tourism investment market in the Canary Islands faces new regulatory clarification that could redefine mergers and acquisitions in the sector. A binding tax ruling, issued by the Directorate General of Taxes of the Regional Ministry of Finance for the 2025 fiscal year, has established a critical precedent regarding the application of the Canary Islands General Indirect Tax (IGIC) to the transfer of hotel businesses in areas with high tourist concentration, such as Maspalomas. The ruling aims to ensure that tax incentives are strictly applied to the continuity of economic activity.
The transaction under review focused on the phased acquisition of an apartment and commercial complex. The transaction involved, firstly, the transfer of the business lease agreement along with the Business Unit (licenses, personnel, and know-how) by the operating entity. Secondly, and separately, the acquiring entity purchased the property from the original owner. The Tax Agency had to determine whether these transfers qualified for the IGIC exemption, a benefit reserved for the transfer of a group of assets suitable for continuing an economic activity.
The analysis by the Directorate General of Taxes has introduced the doctrine of the 'Empty Asset'. The purchase of the operating business (Business Unit), including licenses, staff, and organization, is considered a transfer of a complete asset and is therefore not subject to IGIC (Article 9.1 of Law 20/1991). The continuity of hotel operations is guaranteed in this segment.
However, the Owner's acquisition of the building was classified as a mere transfer of assets. The Tax Authority argued that this transfer of the property "is not accompanied by the necessary organizational structure of production factors." It is, essentially, the acquisition of an "empty asset." Consequently, this transaction is subject to IGIC (Canary Islands General Indirect Tax), although it may qualify for the general exemption on property transfers (ITPAJD).
This distinction has direct consequences for investment in southern Gran Canaria. For a hotel property transfer to be considered exempt from IGIC (Canary Islands General Indirect Tax) and benefit from the flexibility of the Economic and Fiscal Regime (REF), the transfer must be complete. Simply purchasing the walls (the hard asset), without including the goodwill and licenses, does not qualify as a complete transfer. Purchase transactions that are intentionally segmented are subject to taxation under either IGIC or ITPAJD (Transfer Tax and Stamp Duty) for the real estate portion.
The binding consultation of 2025 serves as a clear warning to investors. The Canary Islands Tax Authority's strict interpretation aims to ensure that tax exemptions apply only to transactions that guarantee the continuity of organized economic activity, limiting the possibility of using this mechanism for mere real estate speculation. Legal certainty is strengthened, but it demands greater precision and tax planning in the process of acquiring tourism assets.
