On 1 January 2018, the new Special Regime for Small Professional Entrepreneurs (REPEP) came into force, simplified with the acronym REPEP. This regime aims to help individuals who start their business in the Canary Islands by reducing the tax impact of the tax rate applied in this territory. Let us look at the most important aspects of this regime below:

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1. Scope of application: Included in the REPEP will be, unless renounced, natural persons who carry out their activity in the Canary Islands and whose total volume of operations carried out during the previous calendar year in the set of their business or professional activities does not exceed €30,000 (excluding IGIC).

2. Renunciation: The renunciation of the REPEP will be effective for a minimum period of three years. It can be voluntary or due to exceeding the limit allowed to benefit from said regime.

3. Exclusion: The following will be excluded:

• Freelancers whose total volume of operations exceeds €30,000 during the fiscal year.
   
• Freelancers who carry out exclusively supplies of goods or services exempt from the tax (retailers).
   
• Failure to comply with the obligation to inform the Canary Islands Tax Agency of an economic activity via census form, or the development of the same at a domicile.

4. Obligations: Those benefiting from this regime must comply with the following particular obligations:

• Submit the inclusion, renunciation, or exclusion to the Canary Islands Tax Agency via census declaration.
• Issue invoices adding the expression “Exención franquicia fiscal” (Fiscal franchise exemption)

Although these are the fundamental features of the REPEP, there are various issues that must be examined in depth. Therefore, if you are interested in benefiting from this special regime, we recommend contacting your advisor to study your specific case.