The Ministry of Finance has announced the cancellation of ministerial decision number “265” from 2023, which will be replaced by a new ministerial decision number “229” from 2025 concerning eligible and ineligible activities. This new decision outlines the scope of qualified activities for corporate tax purposes in free zones, including an expanded range of eligible goods such as industrial chemicals, associated secondary products, and environmental goods. It also offers clarity regarding treasury and financing services for related parties.
Additionally, the ministry has issued ministerial decision number “230” from 2025, specifying approved entities responsible for preparing price reports in line with decision number “229” regarding eligible and ineligible activities.
The ministry emphasized the vital role of free zones in promoting the nation’s economic growth, attracting investments, and creating a supportive business environment. These new decisions highlight the significance of free zones in the country’s strategy to diversify its economic activities while ensuring compliance with international tax standards.
Specifically, ministerial decision number “229” from 2025 clarifies the scope of eligible goods, removing the phrase “goods in their raw form.” It now allows the trade of metals, minerals, industrial chemicals, energy goods, and agricultural products, along with their associated secondary products, provided that there is an “announced price” for these items.
The term “announced price” refers to the price of the qualified goods or related items, determined by an accredited market for goods or a recognized pricing entity designated by a decision from the minister.
Furthermore, ministerial decision number “230” from 2025 defines the accredited entities for producing price reports, serving as a reference source for commodity prices. This will provide greater clarity and certainty for taxpayers regarding the pricing of these goods.
These updates also include various advantages, such as allowing taxpayers engaged in eligible treasury and financing services for related parties to conduct investment activities on their own account. Moreover, it clarifies that the distribution of goods and materials from a designated area may involve transactions with public benefit entities without affecting the minimum revenue requirements for qualified individuals operating in free zones.
It is noteworthy that the competitive corporate tax system, combined with unprecedented preferential tax rates for eligible activities, bolsters the UAE’s position as a leading global business and investment hub, supporting its sustainable development agenda.