European economic interest groupings

Article 44 of the LIS regulates the special tax regime applicable to European Economic Interest Groupings governed by Council Regulation (EEC) No 2137/85 of 25 July 1985, which states that only companies and other public or private law entities formed in accordance with the law of a Member State and having their statutory or registered office and central administration in the Community may be members of a European Economic Interest Grouping.

Similarly, where under the law of a Member State a company or other legal entity is not required to have a statutory or registered office, it shall be sufficient for it to be considered a European Economic Interest Grouping if that company or other legal entity has its head office in the Community.

Membership of a European Economic Interest Grouping shall also be open to natural persons pursuing an industrial, commercial, craft, agricultural, professional or other service activity in the Community.

Therefore, as of 1 January 2021, this type of joint venture, formed by Spanish and British entities, could not be considered a European Economic Interest Grouping and would not be subject to the special tax regime for allocating income to the partners established in Article 44 of the LIS.