UAE Corporate Tax Update: New Rules for Qualifying Free Zone Persons

UAE, 17 September, 2025: On 28 August 2025, the UAE Ministry of Finance issued Ministerial Decision No. 229 of 2025 (MD 229) and Ministerial Decision No. 230 of 2025 (MD 230), effective 1 June 2023, providing key updates to the Qualifying Free Zone Persons (QFZP) Regime. MD 229 replaces MD 265 of 2023.

Key Highlights

1. Expansion of Qualifying Commodities

• Now includes industrial chemicals, by-products of production/extraction, and environmental commodities (e.g., carbon credits, renewable energy certificates).

• Commodities qualify if a Quoted Price exists, set by a recognised exchange or price reporting agency (as listed in MD 230).

• Clarifies that trading covers physical commodities, related hedging derivatives, and structured commodity financing.

• Excludes businesses where 51%+ of revenue comes from distribution, warehousing, logistics, or inventory management.

2. Updates to Qualifying Activities

• Treasury & financing services now include activities for related parties or own account.

• Distribution in or from a Designated Zone qualifies if goods are imported through the zone and supplied to resellers, processors, or public benefit entities.

3. Audited Financial Statements

• QFZPs must prepare audited financial statements under Ministerial Decision No. 84 of 2025.

Business Implications

• Commodity traders and Free Zone businesses must apply these updates from 1 June 2023.

• Tax positions should be reviewed before the 30 September 2025 filing deadline (or corrected if already filed).

• Additional MoF guidance may follow.

The UAE continues to strengthen its Free Zone tax regime, reinforcing its role as a global hub for commodity trading, financing, investment, logistics, and related sectors under the 0% Corporate Tax benefit.