Creative, arts and entertainment activities

ISIC 90 is not listed as a 'Qualifying Activity' under MD 229 of 2023. Consequently, income from these activities is only qualifying if it constitutes 'Income from transactions with other Free Zone Persons' and does not involve 'Excluded Activities'. If the creative entity deals with mainland individuals (B2C), the income is non-qualifying and subject to the 5% de minimis threshold or the standard 9% rate.

Audit Red Flag

Characterization of 'Royalties' from creative IP as 'Service Fees' to circumvent the strict IP-regime nexus requirements or to hide non-qualifying income from mainland consumers.

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