The UAE has introduced new updates to its corporate tax rules that directly affect companies operating in free zones. These changes are part of the government’s effort to maintain a clear and supportive tax framework while aligning with international standards.
Key Changes to Commodity Trading Rules
The Ministry of Finance announced Ministerial Decision No. 229 of 2025, which replaced an earlier ruling issued in 2023. The main update concerns qualifying commodity trading.
Previously, the rules only allowed trading in commodities “in raw form.” The new decision removes that restriction. Now, companies can trade metals, minerals, energy, agricultural goods, industrial chemicals, environmental commodities, and associated by-products.
To qualify, a quoted price must exist for these commodities. A quoted price means one set by a recognised commodity exchange or a recognised price reporting agency. Ministerial Decision No. 230 of 2025 lists the agencies that meet this standard.
This update provides clarity for free zone companies engaged in commodity markets, especially those in industrial and environmental sectors.
Why the Update Matters
Free zones play a major role in attracting investment and driving economic growth in the UAE. By expanding the scope of qualifying activities, the government is reinforcing its commitment to creating an enabling business environment.
The update also reflects the UAE’s economic diversification strategy. By broadening the definition of qualifying commodities, the rules now support a wider range of industries, from energy to chemicals. This helps maintain the country’s appeal as a base for global trade.
Corporate Tax in the UAE: A Quick Recap
The UAE introduced a federal corporate tax in 2023 with a standard rate of 9 per cent. Companies with taxable profits above Dh375,000 fall into the taxable bracket, while those below remain at zero per cent.
Free zone companies, however, can qualify for a zero per cent corporate tax rate on certain types of income. Qualifying activities include manufacturing, logistics, ship ownership, reinsurance, aircraft leasing, investment management, and group financing services. Distributions from designated zones also fall under this category if they meet set conditions.
With the new ruling, qualifying income now covers a broader set of commodity trading activities, making free zones more attractive for global businesses.
Impact on Free Zone Companies
The change provides certainty to companies that deal with commodities beyond raw materials. It means they can continue to enjoy tax benefits while expanding their business scope.
For businesses that already paid taxes under the previous rules, further guidance will be needed. The Ministry of Finance is expected to release clarifications in the coming months to ensure smooth compliance.
The Bigger Picture
The UAE’s decision shows its focus on balancing competitiveness with compliance. By offering tax clarity and extending incentives, it ensures that free zones remain a strong driver of investment.
For companies seeking to expand or set up a tax free business Dubai, the new framework strengthens the value of choosing the UAE. It highlights the country’s role as a secure and transparent hub for regional and global trade.
Preparing for the Future
Businesses should carefully review the updated ministerial decisions and assess how they apply to their activities. Consulting with tax advisors will be key for companies involved in commodity trading, as proper classification can mean the difference between paying 9 per cent or zero per cent tax.
The new rules also underline the importance of proper documentation. Companies must be able to show that their traded commodities have recognised quoted prices to qualify for tax relief.
Conclusion
The UAE’s updated corporate tax framework gives free zone companies more flexibility while reinforcing global tax standards. By expanding the scope of qualifying activities, the government is ensuring that free zones remain competitive and attractive to international investors.
For many businesses, this update enhances the appeal of operating in a tax free business Dubai, making the UAE an even stronger hub for trade and growth.
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