MoF Updates Ministerial Decisions On Qualifying And Excluded Activities For Corporate Tax In Free Zones

The Ministry of Finance (MoF) has introduced Ministerial Decision No. 229 of 2025, replacing the previous Ministerial Decision No. 265 of 2023. This update refines the scope of Qualifying Activities for Corporate Tax purposes within Free Zones. The changes now encompass industrial chemicals, Associated By-products, and environmental commodities under Qualifying Commodity Trading, while also clarifying Treasury and financing services for Related Parties.

Ministerial Decision No. 230 of 2025 specifies Recognised Price Reporting Agencies relevant to the updated Qualifying Activities and Excluded Activities. This decision aims to provide clarity and certainty for taxpayers by listing recognised pricing agencies. These agencies are crucial for determining Quoted Prices for commodities traded within Free Zones.

The Ministry highlighted the significant role Free Zones play in boosting the UAE's economic growth. They attract investments and create a conducive business environment, aligning with the country's economic diversification strategy. The new decisions underscore the importance of Free Zones in supporting this strategy and maintaining compliance with international tax standards.

Ministerial Decision No. 229 of 2025 further elaborates on trading activities by removing the term "in raw form." It now permits trading metals, minerals, industrial chemicals, energy, agricultural commodities, and their Associated By-products if a Quoted Price exists. A Quoted Price is determined by a Recognised Commodity Exchange Market or a Recognised Price Reporting Agency as specified by the Minister.

Additional beneficial changes include self-investment activities for Treasury and financing services related to Related Parties or taxpayers' own accounts. The decision also clarifies that distributing goods or materials from a Designated Zone can involve transactions with public benefit entities without affecting the de-minimis threshold.

The UAE's competitive Corporate Tax regime, along with preferential tax treatment for Qualifying Activities, reinforces its status as a global business hub. This supports the nation's sustainable development goals by fostering an attractive environment for business and investment.

The Ministry's updates reflect its commitment to providing a supportive business climate while adhering to international tax norms. These measures ensure that Free Zones continue to contribute significantly to the UAE's economic landscape.

With inputs from WAM