Activities of head offices; management consultancy activities

Under MD 229 of 2025, Head Office activities (7010) are Qualifying Activities when provided to Related Parties. However, Management Consultancy (7020) provided to non-Related Parties is treated as an Excluded Activity. Forensic auditors will scrutinize the 'Related Party' nexus and verify that Core Income Generating Activities (CIGA), specifically strategic decision-making and senior management oversight, are physically performed within the Free Zone.

Audit Red Flag

Mischaracterizing third-party management consultancy fees as 'Head Office' recharges to Related Parties to evade the 5% de minimis threshold for Excluded Activities.

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