Warehousing and storage

Warehousing (ISIC 521) qualifies for 0% tax only if it constitutes 'Logistics Services' involving active management, handling, or distribution. If the entity merely rents out the shell of the warehouse without providing ancillary logistics services, the income is treated as 'Income from Immovable Property'. Under MD 229 of 2025, such income is an Excluded Activity unless the transaction is with another QFZP and the property is located within a Designated Zone.

Audit Red Flag

Re-characterization of passive lease income from warehouse floor space as active 'Logistics Services' to avoid the 9% tax on income from Immovable Property.

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