UAE clarifies free zone corporate tax rules with new decisions

MoF expands scope of qualifying trades and names recognised pricing agencies

Last updated: September 03, 2025 | 15:23

1 MIN READ

UAE clarifies free zone corporate tax rules with new decisions

Shutterstock

Dubai: The Ministry of Finance has issued two new ministerial decisions that change how corporate tax rules apply to businesses in UAE free zones.

The updates replace an older decision from 2023 and bring greater clarity on what counts as qualifying activities that benefit from free zone tax incentives.

Key changes:

Qualifying commodity trading now includes industrial chemicals, environmental commodities, and by-products of qualifying commodities, in addition to metals, minerals, energy, and agricultural products.
Businesses can now trade commodities beyond just their “raw form,” as long as a recognised market price exists.
Treasury and financing services are clarified to include activities done for related parties or for the business’s own account.
Distribution of goods from designated zones can include transactions with public benefit entities without affecting compliance thresholds.

Also Read: UAE Corporate Tax: How ready are companies in meeting Sept. 30 deadline?

Price reporting agencies

A second decision sets out the list of recognised price reporting agencies that businesses must use for quoted commodity prices. This gives companies clearer guidance on compliance.

The Ministry highlighted that the changes aim to support the UAE’s free zones, which play a major role in attracting investment and driving economic diversification.

For businesses, the new framework means more flexibility in trading a wider range of commodities while retaining the corporate tax advantages offered to qualifying activities in free zones.

Justin VargheseYour Money Editor

Justin is a personal finance author and seasoned business journalist with over a decade of experience. He makes it his mission to break down complex financial topics and make them clear, relatable, and relevant—helping everyday readers navigate today’s economy with confidence. Before returning to his Middle Eastern roots, where he was born and raised, Justin worked as a Business Correspondent at Reuters, reporting on equities and economic trends across both the Middle East and Asia-Pacific regions.