Decoding the ZEC: A Tax Haven for Expats in Tenerife (and Beyond!)

Are you an expat living in Spain, or perhaps considering making the move? Navigating the Spanish tax system can feel like deciphering a foreign language – especially when it comes to special tax regimes. But fear not! As a leading bilingual accounting firm in Puerto de la Cruz, Tenerife, we're here to shed light on a particularly attractive opportunity: the Zona Especial Canaria (ZEC), or Canary Islands Special Zone.

What is the ZEC?

The ZEC is a low-tax zone established to promote economic development in the Canary Islands. It offers significant tax advantages to companies that meet specific requirements, making it a potential goldmine for expats looking to start or relocate their businesses.

Key Benefits of the ZEC:

• Reduced Corporate Tax Rate: The most significant advantage is a mere 4% corporate tax rate, compared to the standard 25% in mainland Spain. This translates to substantial savings for qualifying businesses.

  
  

• No Withholding Tax on Dividends: ZEC companies are exempt from withholding tax on dividends distributed to parent companies in other EU countries.

  
  

• Exemption from Transfer Tax and IGIC (Canary Islands’ VAT): Certain transactions are exempt from these taxes, further reducing the tax burden.

  
  

Who Can Benefit from the ZEC?

The ZEC is open to a wide range of businesses engaged in industrial, commercial, and service activities. Some examples include:

• Technology companies

• E-commerce businesses

• Consulting firms

• Film production companies

• And many more!

  
  

Meeting the Requirements:

To qualify for ZEC status, businesses must meet certain criteria, including:

• Being a newly created entity.

• Conducting eligible business activities within the ZEC.

• Making a minimum investment in fixed assets within the first two years.

• Creating a minimum number of jobs.

  
  

The Investment and Job Creation Connection:

The required minimum investment can be reduced or even eliminated based on the number of jobs created. This flexibility makes the ZEC even more accessible for smaller businesses and startups.

Why Choose Our Bilingual Tax Services?

Navigating the ZEC application process and ensuring ongoing compliance can be complex. That's where our expert team at In English Gestoría comes in. We offer comprehensive bilingual tax services, including:

• ZEC application assistance

• Tax planning and optimization

• Ongoing accounting and bookkeeping

• Tax return preparation and filing

  
  

As an English-speaking accounting firm based in Puerto de la Cruz, we understand the unique needs of expats in Spain. We provide clear, concise, and culturally sensitive advice to help you maximize your tax benefits and achieve your business goals.

Don't Miss Out on This Opportunity!

The ZEC offers an exceptional opportunity for expats looking for a favorable tax environment in Spain. Contact us today for a free consultation to discuss how we can help you take advantage of this fantastic regime.

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