Ministerial Decisions No. 229 and 230 of 2025: What Free Zone Businesses Need to Know

On 3 September 2025, the UAE Ministry of Finance issued two important decisions – Ministerial Decision No. 229 of 2025 and Ministerial Decision No. 230 of 2025. Both apply retroactively from 1 June 2023 and deal with how Free Zone companies can continue to enjoy the 0% corporate tax rate on their qualifying income.

For Free Zone businesses, especially those involved in trading commodities or operating in new sectors like chemicals and environmental products, these decisions are not just technical updates. They are the rules that will decide whether a company pays 0% tax or the standard corporate tax rate.

Background: From Federal Decree-Law No. 47 of 2022 to Today

When the UAE introduced Federal Decree-Law No. 47 of 2022 on Corporate Tax, it made headlines because it was the country’s first federal corporate tax regime. But the law came with a major relief: companies in Free Zones could still benefit from a 0% tax rate on their “qualifying income.”

The challenge was that the law did not fully define what “qualifying income” meant. Businesses needed clarity. In 2023, the Ministry issued Ministerial Decision No. 265 of 2023 to give some guidance. It helped, but there were still gaps. For example, it wasn’t clear if chemicals or environmental credits were qualifying commodities. It also didn’t specify which price benchmarks traders should rely on, leading to confusion during audits.

That’s why, in 2025, the Ministry replaced the old decision with two new ones:

· Decision 229 of 2025: Defines which activities and commodities qualify.

· Decision 230 of 2025: Lists the recognised Price Reporting Agencies (PRAs) whose benchmarks must be used.

Together, these two decisions give Free Zone businesses the clarity they were waiting for.

What Ministerial Decision No. 229 of 2025 Covers

Decision 229 expands the list of qualifying activities. It includes:

• Trading in commodities,

• Hedging activities linked to those trades, and

• Structured commodity financing such as prepayments and warehouse receipt financing.

But not every product counts as a “qualifying commodity.” To qualify, the product must have a Quoted Price from a recognised exchange or a recognised PRA.

Here’s where the scope has widened: it’s no longer just metals and energy. The law now includes industrial chemicals, by-products, and environmental commodities like carbon credits and renewable energy certificates.

For Example:

If a DMCC company trades aluminium, it qualifies as long as the price is quoted on a recognised exchange. Now, if the same company expands into trading carbon credits, that also qualifies – provided the credits are priced through one of the recognised agencies.

This matters because many Free Zone companies are moving into clean energy and industrial sectors, not just traditional oil and gas. The law now recognises that shift.

Decision 229 also keeps the de-minimis rule. If a company earns more than 5% of its revenue (or AED 5 million, whichever is lower) from non-qualifying income, it loses the 0% benefit for that tax period and for the following four (4) tax years.

What Ministerial Decision 230 of 2025 Covers

Decision 230 is shorter but equally important. It provides the official list of PRAs whose benchmarks can be used under Decision 229.

The list includes names well known to global traders: S&P Global Commodity Insights (Platts, Fertecon), Argus Media, ICIS, OPIS, RIM, CRU Group, Quantum Commodity Intelligence, Fastmarkets, General Index, ICE, Montel, Spark Commodities, and Expana.

This means companies cannot just pick any index or private data source. If the price comes from a source outside this list, it doesn’t count as a qualifying quoted price.

For Example:

If a company uses an Argus benchmark for jet fuel, it qualifies. If it uses an internal pricing model or an unrecognised data provider, it won’t. This ensures consistency and transparency across all Free Zone companies.

Why These Decisions Matter?

The importance of these decisions comes down to clarity, fairness, and credibility.

By tying everything to recognised exchanges and PRAs, the Ministry ensures that all companies are working with the same numbers. This removes uncertainty, reduces disputes during audits, and prevents unfair advantages. It also builds investor confidence, since banks and partners can see that UAE Free Zone companies follow the same transparent standards used globally.

Equally, by recognising chemicals and environmental credits, the UAE shows it is keeping pace with modern trade. This supports the country’s goal of diversifying its economy and promoting sustainability.

What This Means for Companies

For Free Zone businesses, especially expat-owned firms, the message is simple:

· Review your contracts and pricing references – make sure they use recognised exchanges or PRAs.

· Check past transactions since June 2023 to confirm compliance.

· Keep clear records showing that hedges and financing are directly linked to physical trades.

· Plan for the future – if you are trading in chemicals or carbon credits, these now qualify, so you can grow in these areas with confidence.

Failing to align with these rules risks losing the 0% tax benefit. On the other hand, adapting now ensures you stay compliant and benefit from the clarity the government has provided.

Closing Thoughts

Ministerial Decisions 229 and 230 of 2025 may sound technical, but their impact is very practical. They tell Free Zone companies exactly which activities qualify for the 0% corporate tax rate and which pricing benchmarks are acceptable.

By expanding the scope of commodities and providing an official list of PRAs, the Ministry of Finance has removed uncertainty, promoted transparency, and aligned the UAE with global best practices. For businesses, the takeaway is clear: follow the official sources, review your contracts, and take confidence in the fact that Free Zone tax benefits are here to stay but only for those who meet the rules.