The economy is based primarily on tourism, which makes up 32% of the GDP. The Canaries receive about 10 million tourists per year. Construction makes up nearly 20% of the GDP and tropical agriculture, primarily bananas and tobacco, are grown for export to Europe and the Americas. The canaries grow ample agricultural resources like tomatoes, potatoes, onions, cochineal, sugarcane, grapes, vines, dates, oranges, lemons, figs, wheat, barley, maize, apricots, peaches and almonds.

The islands are outside the European Union customs territory and VAT area, though politically within the EU. Instead of VAT there is a local Sales Tax (IGIC) which has a general rate of 5%, an increased tax rate of 12%, a reduced tax rate of 2% and a zero tax rate for certain basic need products and services (eg telecommunications). The ISO code IC is reserved for representing them in customs affairs. Goods subject to Spanish customs and excise duties and Value Added Tax (VAT), such as tobacco or electronic goods, are therefore significantly cheaper in the Canaries.