Manufacture of vegetable and animal oils and fats

Manufacturing of goods is a Qualifying Activity. However, for the 0% rate to apply to income from the sale of goods to non-Free Zone persons, the goods must be produced within a Designated Zone. Forensic auditors will verify the 'Substantial Transformation' test to ensure the activity is not merely 'Trading' (an Excluded Activity if conducted with non-Free Zone persons).

Audit Red Flag

Misclassification of 're-packaging' or 'simple blending' as 'manufacturing' to bypass the substantial transformation requirement.

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