New Ministerial Decisions Expand Qualifying Activities

The UAE Ministry of Finance has issued updates to the CIT (Corporate Income Tax) regulations affecting free zone businesses. These changes, announced through two recent ministerial decisions, bring clarifications and expansions to qualifying activities that can benefit from preferential tax treatment.

What Has Changed

The Ministry of Finance replaced the previous Ministerial Decision No. 265 of 2023 with two new decisions that provide greater clarity for free zone businesses operating under the UAE’s CIT framework.

Ministerial Decision No. 229 of 2025 focuses on qualifying and excluding activities, while Ministerial Decision No. 230 of 2025 specifies recognised price reporting agencies. These updates reflect the UAE’s ongoing commitment to maintaining its position as a leading business center while aligning with international tax standards.

Key Updates to Qualifying Commodity Trading

One of the most important changes involves the expansion of qualifying commodity trading activities. The new regulations remove the previous restriction that limited trading to commodities “in raw form.”

Under the updated rules, free zone businesses can now trade in metals, minerals, industrial chemicals, energy commodities, agricultural products, and their associated by-products. The key requirement is that these commodities must have a quoted price from recognised sources.

This expansion opens new opportunities for businesses dealing with processed materials and industrial chemicals that were previously excluded from preferential tax treatment.

Understanding Quoted Prices and Recognised Agencies

The concept of “quoted price” is central to determining which commodities qualify for preferential treatment. A quoted price must come from either a recognised commodity exchange market or a recognised price reporting agency as specified by the Minister.

Ministerial Decision No. 230 of 2025 provides the complete list of recognised price reporting agencies, eliminating uncertainty for businesses about which pricing sources are acceptable. This clarity helps companies plan their operations with confidence and ensures compliance with tax requirements.

Treasury and Financing Services Changes

The updates also bring beneficial changes to treasury and financing services. Free zone businesses can now engage in self-investment activities for treasury and financing services, both for related parties and for their own accounts.

This change provides greater flexibility for companies managing their financial operations and investments within the free zone framework while maintaining their qualifying status for preferential tax treatment.

Impact on Associated By-Products

The inclusion of associated by-products in qualifying commodity trading represents an important development for manufacturing and processing businesses. Companies that generate valuable by-products from their main commodity trading activities can now potentially include these products under the preferential tax regime.

This change recognises the reality of modern commodity trading and processing, where by-products often represent significant value and require the same level of operational sophistication as primary commodities.