Activities of holding companies

Holding activities are classified as Qualifying Activities for Free Zone Persons. Forensic scrutiny focuses on the 'De Minimis' threshold; if the entity provides management services to subsidiaries without a separate commercial license or fails to arm's-length price those services, it risks disqualification of the 0% regime for the entire entity.

Audit Red Flag

Intermingling of passive dividend income with active management fees or operational service charges which are subject to the 9% standard rate.

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