# Form 420 — IGIC

Form 420 is the quarterly self-assessment of IGIC (Canary Islands General Indirect Tax). It applies to companies and freelancers with tax domicile in the **Canary Islands**.

If your business is in the Peninsula or Balearic Islands, refer to [Form 303 (VAT)](./modelo-303).

## IGIC Types

The Canary Islands have their own indirect tax system instead of VAT:

| Type | Percentage | Application |
|------|-----------|-----------|
| Zero rate | 0% | Exempt activities |
| Reduced | 3% | Basic services, food |
| General | 7% | Most goods and services |

Frihet automatically normalizes the tax rates on your invoices to these IGIC types for the calculation of Form 420.

## What Frihet Calculates

### Accrued IGIC (passed on)

Calculated from your issued invoices for the quarter:

| Boxes | Concept | Calculation |
|----------|----------|---------|
| 01-02 | Zero rate (0%) | Base + tax amount |
| 03-04 | Reduced (3%) | Base + tax amount |
| 05-06 | General (7%) | Base + tax amount |
| 11 | Total IGIC passed on | Sum of tax amounts |
| 13 | Reverse Charge Mechanism (ISP) | Acquisitions with Reverse Charge |
| 15 | **Total accrued** | Passed on + ISP |

### Deductible IGIC (borne)

Calculated from your recorded expenses with IGIC:

| Boxes | Concept | Calculation |
|----------|----------|---------|
| 16 | Domestic acquisitions | IGIC borne on expenses |
| 17 | Imports | IGIC from imports (if applicable) |
| 22 | **Total deductible** | Sum of deductible concepts |

### Result

| Box | Concept | Calculation |
|---------|----------|---------|
| 23 | Difference | Accrued - Deductible |
| 24 | To offset from previous periods | Negative amount from prior quarters |
| 26 | **Result** | Difference - Offset |

If the result is positive, it is the amount you must pay to the Government of the Canary Islands. If it is negative, it is offset in the following quarter.

## How to use it in Frihet

1. Go to **Tax Calendar**
2. Select the quarter and year
3. Frihet displays the breakdown of Form 420 by IGIC type
4. If you have an amount to offset from previous quarters, enter it
5. Download the PDF as a reference

## Differences with Form 303

| Aspect | Form 303 (VAT) | Form 420 (IGIC) |
|---------|-----------|-------------|
| Territory | Peninsula and Balearic Islands | Canary Islands |
| Main rates | 21%, 10%, 4% | 7%, 3%, 0% |
| Surcharge regime | Yes (5.2% / 1.4% / 0.5%) | Not applicable |
| Submission | AEAT (Tax Agency) | Government of the Canary Islands (ATC) |
| Investment goods | Separate boxes (30-31) | Regularization in box 19 |

## Practical Example

A freelancer in Las Palmas with the following quarter:

**Invoices issued:**
- 5 service invoices at 7%: 4,000 EUR base
- 2 product invoices at 3%: 1,200 EUR base

**Expenses with IGIC:**
- Office supplies: 300 EUR + 21 EUR IGIC
- Software: 150 EUR + 10.50 EUR IGIC

**Calculation:**
```
IGIC Devengado:
  7%: 4.000 x 7% = 280 EUR
  3%: 1.200 x 3% = 36 EUR
  Total devengado: 316 EUR

IGIC Deducible:
  Interiores: 21 + 10,50 = 31,50 EUR

Resultado: 316 - 31,50 = 284,50 EUR (a ingresar)
```

## Form 130 in the Canary Islands

Although IGIC replaces VAT, **Form 130 (IRPF)** is also submitted. If you are a freelancer in the Canary Islands, you must submit both forms quarterly:

- [Form 420](./modelo-420) — IGIC (indirect tax)
- [Form 130](./modelo-130) — IRPF (income tax installment payment)

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