Growing of non-perennial crops

Primary agricultural production is not listed as a Qualifying Activity under the standard Free Zone regime. Income derived from the sale of raw crops is generally treated as Non-Qualifying Income. Forensic focus remains on whether the entity attempts to recharacterize crop sales as 'Distribution of Goods' from a Designated Zone to avoid the 9% headline rate.

Audit Red Flag

Artificial separation of 'Growing' (Excluded) from 'Processing' (potentially Qualifying Manufacturing) to manipulate the 5% De Minimis threshold.

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