evidence: The islands, as an autonomous region of Spain, are in the European Union and the Schengen Area. They are in the European Union Customs Union but outside the VAT area.[130] Instead of VAT there is a local Sales Tax (IGIC) which has a general rate of 7%, an increased tax rate of 13.5%, a reduced tax rate of 3% and a zero tax rate for certain basic need products and services. Consequently, some products are subject to additional VAT if being exported from the islands into mainland Spain or the rest of the EU.