The UAE’s Ministry of Finance has just announced Ministerial Decision No. 229 of 2025, replacing the 2023 framework. This update brings greater clarity and flexibility for Free Zone companies, especially in commodity trading.
Key Highlights:
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Broader Qualifying Activities
The “raw form” restriction has been removed, allowing a wider range of products like industrial chemicals, associated by-products, agricultural goods, energy commodities, and even environmental commodities such as carbon credits to qualify for 0% tax, as long as there is a quoted market price. -
New Pricing Standards
Businesses must use pricing from recognized commodity exchanges or approved price reporting agencies, as listed under Ministerial Decision No. 230 of 2025. -
Treasury & Financing Activities Included
Qualifying Free Zone Persons (QFZPs) can now include self-investment and financing services, even to related parties, as part of their qualifying activity. -
Flexible Distribution for Public Benefit Entities
Distributing goods to public benefit entities is now permitted without affecting Free Zone tax benefits, even for non-core activities — as long as they stay within de-minimis limits.
How This Impacts Free Zone Businesses
| Before (2023 Rules) | Now (2025 Updates) |
|---|---|
| “Raw form” only commodities qualify | Expanded to include processed items and environmental commodities |
| Pricing guidelines were vague or implied | Must use official price sources from recognized agencies |
| Related-party financing may have disqualified you | Now qualifies under QFZP if substance requirements are met |
| Distribution to public benefit entities risky | Now allowed without compromising tax benefits |
What You Should Do Now
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Review Your Activity Scope
Does your business deal in industrial chemicals, environmental assets, or structured commodity financing? These may now qualify. -
Check Your Pricing Sources
Ensure any commodity trading uses pricing from recognized commodity exchanges or agencies. -
Evaluate Treasury & Financing Structure
If you engage in intra-group financing, revisit your structure — these services may now benefit from 0% tax if you hold substance. -
Consult Your Tax Advisor
Not all income will automatically qualify. You must meet Free Zone substance rules, audited financials, and de-minimis thresholds to preserve tax status.
Final Thought
These changes reinforce the UAE’s commitment to clarity, international best practice, and investor-friendly policy in the Free Zone tax regime. If you’d like help assessing your eligibility or filing your CT return with confidence, reach out — we’d be happy to guide you.
Clarity – Compliance – Confidence
At Finzoryx, we emphasise getting these basics right:
- Clarity on how the rules apply to your business.
- Compliance with FTA requirements at every step.
- Confidence that your records will stand up in case of audit.
📩 Reach out at connect@finzoryx.com or call 0503978121 if you’d like us to review your accounting and tax position, and ensure you’re fully compliant.