Show the VAT widget to Canary Islands visitors and understand checkout handling for Spanish and other EU VAT-excluded territories.
TL;DR: Spanish Shopify stores can show the VAT exemption widget to Canary Islands visitors while hiding it from mainland Spain. For checkout VAT removal, EU Tax Exemption can also handle Ceuta and Melilla by delivery postcode. The checkout flow can also support a small set of other EU member-state territories that are outside the EU VAT area, such as Heligoland, Büsingen, Mount Athos, Livigno and Campione d’Italia.
If you run a Shopify store in Spain, you’ve likely encountered this frustrating situation: you want to hide the VAT widget from Spanish consumers (who pay normal IVA), but Canarian businesses need to see it for VAT exemption.
The problem? Shopify sees mainland Spain, the Canary Islands and other Spanish special territories under the same country code: ES. That is fine for shipping, but it is not specific enough for VAT handling.
With our new Region Exceptions feature, you can finally show the VAT exemption widget to visitors from the Canary Islands while keeping it hidden for mainland Spanish shoppers.
The Canary Islands (Islas Canarias) have a special tax status within Spain:
| Region | VAT Status | Tax System |
|---|---|---|
| Mainland Spain | EU VAT Area | IVA (21%) |
| Canary Islands | Outside EU VAT | IGIC (7%) |
| Ceuta & Melilla | Outside EU VAT | IPSI |
Because the Canary Islands are outside the EU VAT area, businesses in Las Palmas, Tenerife, Gran Canaria, and other islands may need different VAT handling when purchasing from mainland EU suppliers. This is why many merchants use a dedicated reverse charge or tax-exclusion flow instead of treating every Spanish address the same.
Ceuta and Melilla create a similar Shopify problem. They are also outside the normal Spanish VAT area, but they use their own postcode ranges instead of Canary Islands postcodes.
There are similar VAT-excluded territory cases in other EU member states too. Germany has Heligoland and Büsingen, Greece has Mount Athos, and Italy has Livigno and Campione d’Italia. The storefront Region Exceptions feature is focused on visibility before checkout, while checkout VAT removal should use the delivery address entered by the buyer.
Setting up Canary Islands VAT exemption takes three steps:
That’s it. Our app automatically detects visitors from the Canary Islands and shows them the VAT validation widget:
If region detection fails for any reason, the widget is shown as a fallback — ensuring no legitimate B2B customer misses the opportunity to validate their VAT number.
This is perfect for:
Already using our B2B checkout button? Region Exceptions works seamlessly with it — Canarian businesses can validate their VAT and proceed to tax-free checkout.
Spanish businesses in the Canary Islands that trade with mainland Spain or Europe have a Spanish VAT number — this is what they’ll enter in the widget. The app validates the number and removes the VAT from their purchase, just like any other B2B transaction.
If your Canarian customers already provide you with a VAT number for their orders, this feature is for them.
We’ve built in test mode so you can verify the feature works without needing a VPN or traveling to the Canary Islands. In the app settings, click “How it works” under Region Exceptions to see the test parameters.
Add these to your cart URL to simulate different visitors — you’ll see exactly what your Canarian customers experience.
When selling to VAT-exempt Canarian businesses, you need proper documentation. Our app handles this automatically:
For a complete overview of EU VAT requirements, see our Complete VAT Guide for Shopify.
Ceuta and Melilla are also Spanish VAT-excluded territories. In checkout, EU Tax Exemption can handle them by delivery postcode:
This is separate from the storefront Region Exceptions flow above. Region Exceptions helps decide when to show the VAT widget before checkout. Checkout VAT removal for the Canary Islands, Ceuta and Melilla is based on the delivery country and postcode, not on IP detection.
For checkout VAT removal, EU Tax Exemption can also support selected non-Spanish territories that are inside an EU member state but outside the EU VAT area:
This is intentionally handled in checkout based on the delivery address. IP detection is useful for storefront visibility, but the delivery postcode gives a cleaner order trail for VAT decisions.
The Canary Islands are normally identified by Spanish delivery postcodes starting with 35 or 38. That means 35000-35999 for the province of Las Palmas and 38000-38999 for the province of Santa Cruz de Tenerife.
The checkout postcode rule supports 35xxx and 38xxx for the Canary Islands, 51xxx for Ceuta, and 52xxx for Melilla, when the delivery country is Spain.
The checkout rule also supports 27498 for Heligoland, 78266 for Büsingen am Hochrhein, 63086 for Mount Athos, 23041 for Livigno, and 22061 for Campione d’Italia.
35000 belongs to the province of Las Palmas. For Shopify VAT handling, the important signal is the postcode prefix: 35xxx means a Canary Islands delivery address.
This article describes Region Exceptions for showing the storefront VAT widget to Canary Islands visitors. For automatic checkout VAT removal based on the delivery postcode, read our separate guide: Spanish VAT-excluded territories in Shopify checkout by postcode.
For normal B2B VAT exemption, a VAT number can still be useful for documentation and validation. For checkout VAT removal based on these Spanish special territory postcodes, the decision is based on the delivery territory rather than VIES validation.
Yes for checkout postcode-based VAT removal: 51xxx is treated as Ceuta and 52xxx as Melilla. The storefront Region Exceptions feature described in the main setup steps is still focused on showing the widget to Canary Islands visitors.
Region Exceptions is available now for all EU Tax Exemption app users at no additional cost.
Questions? Reach out via the Help button in the app. We can help you set up the right VAT experience for mainland Spain, the Canary Islands, Ceuta, Melilla and other supported VAT-excluded territories.