Manufacture of military fighting vehicles

Manufacturing of military hardware is a Qualifying Activity under the 'Manufacturing of goods or materials' category. Forensic scrutiny focuses on the bifurcation of contract value between the physical asset (0%) and long-term technical support or training services, which may be deemed Excluded Activities if not strictly ancillary.

Audit Red Flag

Recharacterization of 'Maintenance, Repair, and Overhaul' (MRO) services as 'Manufacturing' to bypass the 5% de minimis threshold for non-qualifying mainland revenue.

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