Monday, May 29

Buying online from the Canary Islands has become a headache for users: this is the odyssey to acquire products from the islands

Buying products from the Canary Islands is a headache for the inhabitants of the islands. Browse Amazon or Privalia and check that the product you wanted for a long time is not sent to the archipelago is already part of the Canarian ideology. As well as finding high shipping costs and extras derived from customs procedures. This odyssey when buying has led many canaries to complain on the networks. More than 60% of online stores do not ship to the Canary Islands, according to the comparator Idealo. And only 4% make urgent shipments. But why don’t these companies send to the Canary Islands?

The truth is that the geographical location, the extremely high shipping costs and, above all, the complicated customs procedures mean that very few online businesses and brands want to sell online in the formerly known “Fortunate Islands”. Although lately not so much. And it is that the Canarian market is made up of more than two million potential clients, who end up being the most affected. And the reality is that brands as famous as Nike, Dockers or Levi’s do not ship to the islands.

The odyssey of shipments to the Canary Islands

Carlos A. Marrero, a resident of Santa Cruz de Tenerife, has experienced this problem. He tells us that he had been after a Chuwi brand computer for some time, which cost 459 euros on Amazon, but is sold by the supplier Chuwi-Direct. When making the purchase process, some red letters appeared on the product file: “Sorry, this product cannot be shipped to the selected address. Change the shipping address or remove the product from your order».

“It’s the same as always, almost nothing is sent here, if I want to buy the laptop I have to do it in another online store where it will cost me at least 600 euros. Plus the DUA, of course. In the end, if you manage to buy it, it goes out of your way,” he says, disgusted.

However, Amazon already warns in its policies and conditions: “Amazon Marketplace third-party sellers set their own shipping restrictionsHowever, many of them send their products to the Canary Islands, Ceuta and Melilla. Therefore, we recommend that you contact the seller directly before placing your order.”

Image of an Amazon product that is not shipped to the Canary Islands.

The IGIC, the AIEM and the DUA: this is the tax regime of the Canary Islands

To better understand the situation of the islands, it is necessary to know that the Canary Islands have their own tax regime and that it is completely different from the rest of the tax system of the Spanish state. For example, The Canary Islands are outside the scope of application of the Value Added Tax (VAT), so that in practice any acquisition from the Canary Islands is considered an import.

Nevertheless, they do have their own Canarian indirect tax, the so-called IGIC. It is a state tax levied on supplies of goods and services provided in the Canary Islands. While the general VAT is 21%, in the Canary Islands, depending on the type of merchandise that is exported or sold, there are different types of IGIC, but the general one is 7%. Finally, you should know that when buying products from the peninsula, Canarians must sometimes pay the AIEM (Excise Tax on Imports and Deliveries of Merchandise) or the DUA.

The first is an indirect tax levied on the production and import of goods. The generally applicable rate is 5% of the value of the merchandise. The DUA (Single Administrative Document) is the import or export declaration before the customs authorities, which depend on the Ministry of Finance. Since 2017, goods destined for the Canary Islands and whose value is less than €150 are exempt from the DUA.

The ‘wow’ factor in customs charges

Rayco Expósito, a resident of Santa Cruz de Tenerife, has also had several bad experiences when buying online from his city. He says that he wanted to buy some glasses on the Tus Gafas Online portal and they invented an excuse not to send them: “It turns out that I already had the invoice and everything was up and running, but I contacted them again and told them that for the invoice in instead of VAT you could put the IGIC and that way it was cheaper. That was when they told me that their lawyers had told them that they couldn’t sell to the Canary Islands”, he says.

He also remembers the odyssey of buying some shoes on Amazon Spain. “The package arrived but they held it for me at Customs. I had to do some paperwork, pay €30 of other taxes and with that they gave it to me at the Post Office. First I went to the Hacienda Canaria (different from the state) and with the income and the paperwork done, I went back to the Post Office to pick up the shoes. The curious thing with this topic is that purchases in the peninsula and Europe are very complicated. But if it comes from China, nothing at all, all facilities, zero problems”, he says sullenly.

Such is the situation for Canarian buyers that a few years ago several fans launched an extension for Chrome and Firefox browsers called SendHerePlz, that takes care of automatically checking on the search results page if the products have shipping restrictions, marking them in a lighter color and with a red icon so that the user can quickly identify them without having to click on each one.

This is Cainiao, the AliExpress logistics company that wants to ship to the whole world in 72 hours for three dollars a month

Another problem is that for shipments to the Canary Islands you have to take into account the added costs of customs clearance and a higher cost of the transport service itself. These added costs prevent companies on the Peninsula from defining a definitive price for online sales, because they do not know the specific characteristics, and this also affects the customer, who sometimes finds himself with the “surprise” factor when receiving the package.

María Román, from Lanzarote, bought a dress on the online fashion portal Asos. “When I bought it it cost me 30 euros, but then I had to pay 15 euros more in customs”, comment. And he adds: “Most times they don’t specify anything or it’s not very clear and then you find that when you pick up the package you have to pay customs. This cost sometimes exceeds the purchase price, so it is not worth it and many people end up returning the package”.

In the case of the Canary Islands, communication with the peninsula can only be by ship or plane, the ship being a cheaper means of transport. But its connections are less fast, so if the products sold by the store are relatively small, sometimes it is not a good option since it increases the cost of the product. And more so when customers want to return those products to stores.

On July 1, the "ecommerce VAT package": buying pens on AliExpress will no longer pay

But the determination of the canaries when it comes to acquiring products from the peninsula does not end there. Many of them go to relatives or friends who live in communities such as Madrid or Andalusia so that the stores send the products to their addresses and, later, they send them to the Canary Islands. Proof of how this method has boomed is the originality of the portal I am an e-logger. It is a company that offers your postal address for the delivery of the products and then they send them to individuals on the islands at a small cost.

More and more companies interested in reaching the Canarian market

Luis Alcalá, Director of Projects at FreshCommerce and expert in online business affirms that “there are still logistics companies that charge you an amount for management, even if the product is less than 150 euros”. Although he is positive about the initiative of large companies to create platforms only for the Canary Islands, as El Corte Inglés has done, Media Markt the PC Components. “If I buy PC Components as a Canary and put Canary Islands as the address, the VAT will automatically change for the IGIC —which is less— and he is going to apply some customs management expenses to me. The problem is that small businesses may not be compensated for these technological issues and customs procedures,” he explains.

Upgrade: In June 2021, the Canary Islands Tax Agency extended the IGIC exemption for values ​​under 150 euros and the exemption from carrying out the DUA.”

According to a 2021 Idealo report, the number of online stores that ship to the Canary Islands has increased by 8% since 2017, which represents an increase of 2% per year.

The complexity of the procedures and possible returns is, on many occasions, the reason why many businesses prefer not to send to the Canary Islands. “There are even many canaries who are unaware of the existence of the IGIC and get angry when they see that they have to pay that local tax. They get very angry, they return the package and the companies have to do twice as much work. Therefore, they prefer to avoid all those headaches”, says Alcalá.

And he concludes: “I think the problem has been reduced in recent years. We have more examples of stores that ship to our islands, but the ideal would be for that limit of 150 euros in the DUA to be extended and for peninsular companies to be aware that they can reach our market of two million inhabitants and 14 million tourists. itinerant, that some spend up to six months here and make purchases. Large companies are understanding it, but many medium and small e-commerce have not decided to take the step to adapt yet”.

Image | Pickawood