Decree-Law 5/2026: fiscal measures, European funds and dependency in the Canary Islands

The Government of the Canary Islands has published in the Official Gazette of the Canary Islands the Decree-Law 5/2026, of 27 July, which brings together in a single text urgent tax measures, the flexibilisation of the management of the Next Generation European funds and the unblocking of the new accreditation model for dependency centres and services. The regulation, approved by the Governing Council on 27 July 2026, entered into force on the day following its publication in the BOC.

The decree-law, signed by the president Fernando Clavijo Batlle, was processed at the joint proposal of the councillors for Finance and Relations with the European Union, Matilde Pastora Asián González, and for Social Welfare, Equality, Youth, Children and Families, María Candelaria Delgado Toledo, and must be ratified by the Parliament of the Canary Islands. The explanatory memorandum justifies the urgent procedure on the basis of three objectives: clarifying the taxation of fuels, avoiding the loss of European funding and giving effect to the already recognised right to dependency care.

Tax measures: fuels, guarantees and carbon dioxide

The tax block modifies five regulations. In the IGIC and the AIEM, the super-reduced rate of 3 percent under article 34.Uno.g) of the consolidated text approved by Legislative Decree 1/2025, of 13 October, is abolished in order to dispel doubts about the specific rate of 1 percent that, since 1 January 2026, taxes petroleum and refined products, even when mixed with biofuels.

• Law 5/1986, of 28 July, on the Tax on Petroleum-Derived Fuels incorporates hydrogenated vegetable oil (HVO) into biofuels that are taxed at the rate of petrol or diesel when delivered mixed.
• The tax levy on automotive petrol and diesel extends its taxable event to mixtures with biofuels, in coordination with Legislative Decree 1/1994, of 29 July.
• Article 37.2 of the consolidated text of transferred taxes eliminates the requirement of a registered office in the Canary Islands for mutual guarantee companies to apply the 0.1 percent rate in documented legal acts, in accordance with STC 20/2026.
• The import of carbon dioxide is taxed at the zero AIEM rate until 31 March 2027, given the production stoppage, planned from 1 August 2026, of the archipelago’s only CO2-emitting company, linked to the manufacture of glass containers.

European funds: more scope to spend without losing funding

Articles 25 and 27 of Law 4/2021, of 2 August, regulating multi-year spending commitments and advance processing charged to service 70 “Recovery Mechanism”, are amended. The time limit “nor financial year 2026” is replaced by “nor the maximum deadline envisaged for its execution”, maintaining the ceiling of five annual instalments and the percentages of 100, 70, 60 and 50 per cent per year. The measure responds to the extension of implementation schedules adopted by the General State Administration within the Next Generation EU instrument, endowed with EUR 750,000 million.

Dependency: responsible declaration and accreditation

The reform of Law 16/2019, of 2 May, on Social Services of the Canary Islands, adapts the legal framework to the new accreditation regulations: the bringing into operation of centres and services will be subject to a responsible declaration, and linking to the public system will require accreditation with prior authorisation. The regulation also enables collaboration with professional associations, particularly those in social work, to issue technical accreditation reports.

According to data from the Vice-Ministry of Social Welfare as of 31 March 2026, in the Canary Islands there are 71,093 people with an Individual Care Programme (PIA), of whom 55,032 receive effective provision and 16,061 do not; of the latter, 15,028 (93.57 per cent) fall under cases of exclusion not attributable to the Administration. Furthermore, around 60 per cent of the centres and services under the dependency agreement with the island councils lack accreditation, and the scheme derived from Decree 67/2012, of 20 July, has proved to be of little operational use. The Autonomous Community may create, finance and manage places to correct these shortcomings, and provisional accreditations will be enabled for a maximum of two years.

The decree-law fully affects Canarian taxpayers and companies — fuel distributors, CO2 importers and mutual guarantee societies — and the thousands of dependent people awaiting effective provision. With it, the Government of the Canary Islands seeks to avoid the loss of European funds, make the import of a key industrial input cheaper, and shorten the deadlines that currently delay the entry of centres and services into the public system.

Source: Official Gazette of the Canary Islands, No. 163, of 14 August 2026, I. General provisions, p. 31708 (official reference: Decree-Law 5/2026, of 27 July).