The Audiencia Nacional reinforces legal certainty and the role of EIGs in audiovisual taxation

The National High Court has once again confirmed that Economic Interest Groupings (EIGs) can hold the status of "production companies" for the purposes of the Cinema Law, allowing the allocation of tax credits to their members.

In recent years, the Tax Agency (AEAT) has intensified its control over Economic Interest Groupings (EIGs), especially those used to finance audiovisual projects. This increased scrutiny, reflected in the Tax Control Plan 2025, has affected both the EIGs themselves and the investors who apply the tax deductions generated by these corporate vehicles, which are recognised by current legislation.

As a result, many companies have reinforced their structures and supporting documentation, in a context of growing conflict with the Administration.

In this scenario, the National Court's ruling of 30 October 2025 (SAN 4689/2025) marks a relevant milestone. Not only because of its impact on the specific case, but also because it consolidates a line of jurisprudence that provides legal certainty to a sector that for years has operated under considerable tax uncertainty.

EIGs as film production companies

The National Court reiterates that EIGs may hold the status of film production companies for the purposes of the Cinema Law and, therefore, generate tax deductions in corporate income tax attributable to their members. This position had already been upheld in previous rulings issued in 2025, such as those handed down in appeals 605/2020 (29 January) and 1096/2020 (27 June).

Against this, the AEAT had been arguing that some EIGs lacked sufficient means of their own or real activity, which would prevent their classification as production companies and, consequently, the generation of deductions for audiovisual investments.

The judgment analyses the concept of "film producer" and concludes that the EIG in question fulfilled the requirements: initiative in management, ownership of rights and assumption of risks.

Furthermore, the Chamber recalls that tax law cannot create autonomous concepts outside the law, and that the concept of producer must be taken from the film legislation. Those rules, moreover, expressly encourage the use of EIGs as production structures, thus reinforcing the validity of the model.

The increased deduction in the Canary Islands and the tax domicile of partners

Another of the key aspects analysed is whether the partners of an EIG domiciled in the Canary Islands must also have their tax residence in the archipelago in order to benefit from the increased deduction of the Canary Islands Economic and Fiscal Regime (REF).

This deduction can be up to 80 % more than the general deduction, which in practice translates into 54 % on the first million euros of investment and 45 % on the excess, within the intensity limits provided for.

The Abogacía del Estado, relying on a judgment of the Canary Islands Supreme Court of 20 June 2022, argued that the partner should also be resident in the Canary Islands. This criterion coincides with the doctrine of the Directorate General for Taxation, which distinguishes between:

• The partners of EIGs, to whom negative tax bases and deduction bases are imputed. In this case, when deduction "bases" are imputed to them, they will impute the deduction according to the regulations applicable in their place of tax residence (that of the partner and not of the EIG).
• The financiers of audiovisual projects, to whom the deductions are assigned. As this is an assignment of deductions, the deduction will be calculated in accordance with the rules in force in the place of tax residence of the EIG (not of the partners).

From this technical perspective, which we share, if the partner of an EIG resides in the common territory, it should apply the general corporate income tax rules, without access to the increased coefficients of the REF.

However, the Audiencia Nacional clearly rejects this interpretation. It states that the deduction corresponds to the EIG, not to the partners, who only receive the imputation of the bases and deductions generated.

Furthermore, it recalls that the REF is not a regime reserved for Canary Islands companies, but an instrument to compensate for insularity and attract investment to the archipelago.

Finalist interpretation of the REF

The Chamber supports its position with abundant case law from the Supreme Court (2006, 2015, 2017 and 2023) and the Constitutional Court, stressing that the REF must be interpreted with a finalist, not restrictive, criterion.

Allowing the participation of investors from all over Spain favours the arrival of capital to the Canary Islands and avoids imposing limits that the legislator never established.

Conclusion

The judgment of the Audiencia Nacional of 30 October 2025 provides a significant dose of clarity in a historically conflictive area: the classification of EIGs as production companies in audiovisual projects.

Despite the reinforcement of control by the AEAT, the case law consolidates the legitimacy of these structures to generate tax deductions. Likewise, the courts seem to be committed to respecting prior administrative recognition granted by other public authorities -such as the ICAA or the Ministry of Science-, preventing the Tax Administration from acting as a de facto legislator.

Finally, although with technical caution, the National Court prioritises the tax domicile of the AIE, and not that of the partners, for access to the increased tax incentives of the REF, thus reinforcing the attractiveness of the Canary Islands as a destination for audiovisual investment.

Access the article written by Francisco Iniesto, partner at ECIJA Madrid and published in Eldrecho.com here.