Corporate Tax Rules Changed for UAE Free Zones

September 8, 2025

The Federal Tax Authority (FTA) has issued Ministerial Decision No. 229 of 2025 (MD 229) and Ministerial Decision No. 230 of 2025 (MD 230), introducing significant updates to the definitions of Qualifying Activities and Excluded Activities for Qualifying Free Zone Persons. These decisions repeal and replace Ministerial Decision No. 265 of 2023, particularly updating the Definitions of Qualifying Commodities and other qualifying activities, and provide enhanced clarity for the application of Corporate Tax rules within Free Zones.

Section	Ministerial Decision No. 265 of 2023	Ministerial Decision No. 229 of 2025
Changes and Additions to the Definition Section
Qualifying Commodities	Earlier in MD 265 the scope was limited to Metals, minerals, energy and agriculture commodities traded on a Recognized Commodities Exchange Market in raw form.	The earlier definition is now broadened and clarifies the scope of the trading of Qualifying Commodities by removing the term “in raw form” and instead allowing the trading of metals, minerals, industrial chemicals, energy and agricultural commodities and Associated By-products, provided that a Quoted Price for such commodities exists. A Quoted Price is a price of the Qualifying Commodity or a Related Commodity specified by a Recognised Commodity Exchange Market or a Recognised Price Reporting Agency specified by a decision issued by the Minister. (Refer below for the list of Recognised Price Reporting Agencies) Environmental commodities being tradeable assets that represent a specific environmental benefit (e.g., carbon credits, renewable energy certificates).
Recognized Commodities Exchange Market	It was described as any commodities exchange market established in the State that is licensed and regulated by the relevant Competent Authority, or any commodities exchange market established and recognized outside the State of equal standing	This has been expanded to also include commodities exchange market established and recognised outside the State that are licensed and regulated by the relevant foreign authority in the jurisdiction of establishment, or as specified in a decision issued by the Minister.
Competent Authority	MD 265 defined the Competent Authority as only The Central Bank of the United Arab Emirates, the Dubai Financial Services Authority of the Dubai International Financial Centre, the Financial Services Regulatory Authority of the Abu Dhabi Global Market and the Securities and Commodities Authority as applicable.	The definition now has a wider coverage to include all of the earlier authorities plus any other entity as determined by the Minister, as applicable.
Quoted Price	No such definition was provided earlier	A new definition has now been added as the price of the Qualifying Commodity or a Related Commodity specified by a Recognized Commodity Exchange Market or a recognized price reporting agency** specified by a Ministerial decision.
Associated By-product	No such definition was provided earlier	Incidental or secondary product made during the production or extraction of the metal, mineral, industrial chemical, energy and agricultural commodity.
Related Commodity	No such definition was provided earlier	Any commodity that is listed in the same chapter in the Common Schedule for Classification and Coding of Goods as a Qualifying Commodity that has a Quoted Price.
Common Schedule for Classification and Coding of Goods	No such definition was provided earlier	Classification and Coding of Goods as a Qualifying Commodity that has a Quoted Price. Common Schedule for Classification and Coding of Goods It means the Common Schedule for the Classification and Coding of Goods for the Gulf Cooperation Council Countries adopted pursuant to Cabinet Decision No. 119 of 2024 referred to above or any legislation that amends or replaces it.
Revised Provisions under Article 2 of Ministerial Decision No. 265 of 2023
Treasury & Financing Services	The scope was limited to providing treasury and financing services only to Related Parties.	This has been broadened to cover treasury and financing services to Related Parties or for its own account.
Trading of Qualifying Commodities	Earlier Trading of Qualifying commodities included 1. Physical trading of Qualifying Commodities. 2. Associated financial derivatives trading used to hedge risks from such activities.	Now, Trading of Qualifying Commodities means: 1. Physical trading of Qualifying Commodities. 2. Associated financial derivatives trading used to hedge risks from such activities. 3. Associated structured commodity financing activity. Provided this activity cannot be conducted by a Qualifying Free Zone Person if revenue from distribution, warehousing, logistics, or inventory management functions is 51% or more of their revenue for the relevant tax period. (structured commodity financing activity shall include prepayment, factoring, forfaiting, countertrade, warehouse receipt financing, export receivable financing, project finance, Islamic trade finance, and streaming financing)
Reinsurance Services and Insurance Activities	Earlier, Defined under Federal Law No. 6 of 2007.	However under recent updates, it has been now regulated under Federal Decree-Law No. 48 of 2023.
Distribution of Goods (Designated Zone)	Earlier, ‘Distribution of goods or materials in or from a Designated Zone’ applied only to customers who resell, process, or alter such goods or materials, or parts thereof, for the purposes of sale or resale.	Distribution of goods/materials in or from Designated Zones (DZs) will be treated as a qualifying activity, including when involving Public Benefit Entities (PBEs). For qualification, distribution should be either to customers who will resell the goods or to a PBE.
Publication and Application of this Decision	This decision shall come into retrospective effect on 1 June 2023.

List of Recognised Price Reporting Agencies

The list attached to Ministerial Decision No. 230 of 2025 on Determination of Recognised Price Reporting Agencies include the following:

S&P Global Commodity Insights (Platts & Fertecon)
Argus Media
ICIS (Independent Commodity Intelligence Services)
OPIS (Oil Price Information Service)
RIM Intelligence
CRU Group
Quantum Commodity Intelligence
Fastmarkets
General Index
ICE (Intercontinental Exchange)
MONTEL Spark Commodities
Expana

Free Zone businesses specially engaged in commodity trading should reassess their eligibility, as the new decisions take effect from 1st June 2023. To evaluate the impact on your business, we kindly request you to share the list of commodities traded, so we can determine whether they now qualify and enable you to benefit from the Corporate Tax @0%.