Sound recording and music publishing activities

Activities under ISIC 592 involve significant Intellectual Property (IP) exploitation. While studio recording services provided to Free Zone Persons may be Qualifying, music publishing royalties are generally Excluded Income unless they meet the strict 'Qualifying Intellectual Property' criteria under the nexus approach. Forensic auditors will scrutinize the bifurcation between service-based revenue and IP-derived royalties to ensure compliance with the 5% or AED 5 million de minimis limit.

Audit Red Flag

Recharacterization of royalty-based music publishing income as 'technical service fees' to circumvent the Excluded Income de minimis threshold.

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