Free Zone Qualifying Activities 2026: Trading of Qualifying Commodities

• 13 September, 2026
• By Safwan, Managing Partner
• Corporate Tax

Last reviewed 13 September 2026 by the Exiloz tax team against the UAE legislation in force on that date. Tax law moves — confirm any figure against tax.gov.ae before you act on it.

Two decisions widened who gets the 0% rate

On 28 August 2025, the Ministry of Finance published Ministerial Decision No. 229 of 2025 and Ministerial Decision No. 230 of 2025, and backdated both to 1 June 2023. They replace Ministerial Decision No. 265 of 2023. Why it matters: they widen the 0% “Trading of Qualifying Commodities” activity to cover industrial chemicals and their associated by-products, on top of the metals, minerals, energy and agricultural goods already in scope. And they tighten the pricing test, a commodity only qualifies if it trades on a recognised exchange or is priced by a Recognised Price Reporting Agency. For a Qualifying Free Zone Person chasing the 0% rate, that changes who is in and who is out. If you would rather not handle this in house, this is what our free zone corporate tax advice covers.

Most free zone traders treat the 0% corporate-tax rate as a given. It isn’t. The rate hangs on a list: the activities the Ministry of Finance counts as “qualifying.” In August 2025 that list moved. If you buy and sell commodities out of a DMCC or JAFZA licence, two decisions now decide whether your trading margin is taxed at 0% or 9%. Here is what changed, who it helps, and the maths that trips people up.

What actually changed on 28 August 2025

Two Ministerial Decisions, published the same day by the Ministry of Finance. Ministerial Decision No. 229 of 2025 resets the list of Qualifying Activities and Excluded Activities. Ministerial Decision No. 230 of 2025 defines the Recognised Price Reporting Agencies that sit behind the commodity-pricing test. Together they replace Ministerial Decision No. 265 of 2023, the old activities rulebook. The detail that matters for your filed returns: both apply retroactively from 1 June 2023, the day corporate tax started. So this is not just a 2026 rule. It reaches back over every tax period you have already closed.

The commodities list just got wider

The headline change is scope. The Trading of Qualifying Commodities activity used to mean metals, minerals, energy and agricultural commodities traded in raw form. MD 229 keeps all of that and adds industrial chemicals and their associated by-products. That is a real opening for the chemicals desks clustered in Dubai’s trade zones, which for two years sat outside the definition and watched those revenues count against them. One condition holds firm across the whole list: the goods must be traded in raw form. Refine it, brand it or package it for the shelf and the income can fall back out of the 0% bucket.

Who qualifies for 0%: the quick table

Treat the table as a starting filter, not a ruling. Two desks trading the same product can land on different sides of the line depending on how the price is set and whether the goods are still in raw form. Confirm your own position against the decisions before you file.

The pricing test: exchange-listed or RPRA-priced

Here is the gate people miss. A commodity only qualifies if its price is objective, either it trades on a recognised commodities exchange, or it is priced by a Recognised Price Reporting Agency named under MD 230 of 2025. A base metal settled against an exchange reference clears it. A drum of solvent sold at a privately negotiated number does not, even if the product itself is on the list. So before you count a trade as qualifying, ask one question: where did the price come from? If the answer is a recognised exchange or a recognised reporting agency, you are on solid ground.

The 0% rate is not a free pass on the rest of the corporate-tax rulebook. You still need adequate substance in the free zone, audited financial statements, and related-party commodity flows priced at arm’s length. Move stock between group entities at an off-market number and the transfer-pricing rules apply regardless of your activity list. Our UAE transfer pricing guide walks through the documentation the Federal Tax Authority now expects.

Worked example: a DMCC desk that also trades chemicals

Take a metals desk on a DMCC licence, a mid-size trading house on AED 120 million of revenue. Roughly AED 96 million comes from exchange-priced base metals in raw form, which clearly qualifies. Another AED 20 million comes from a newer line of bulk industrial solvents. The last AED 4 million is incidental admin recharges.

Now the de minimis test. A Qualifying Free Zone Person keeps the 0% rate only if its non-qualifying revenue stays under the lower of AED 5 million or 5% of total revenue. Five per cent of AED 120 million is AED 6 million, so the cap here is AED 5 million. Under the old MD 265 list, those solvent sales were non-qualifying. AED 20 million of non-qualifying revenue against a AED 5 million cap is not a near miss. It is a full breach. The desk loses QFZP status for that tax period and the four that follow, and pays 9% on everything.

Under MD 229, the picture flips. If those solvents are priced by a Recognised Price Reporting Agency, the AED 20 million is now qualifying income. Non-qualifying revenue drops to the AED 4 million of recharges, comfortably under the AED 5 million cap. The 0% rate holds. And because the change runs from 1 June 2023, the desk can revisit its FY2023 and FY2024 returns and check whether it overpaid on a status it should never have lost.

Common mistakes we see

Where this leaves you

If commodities are your business, the action is not complicated. Map every revenue line to the MD 229 list, confirm each one is raw-form and objectively priced, then re-run the de minimis maths, including the two prior years now back in scope. The wins are real, but so is the paperwork behind the 0% claim. For the full conditions a QFZP has to meet, start with our guide to free zone qualifying income and QFZP rules. If you would rather have someone map your revenue lines and returns for you, our Dubai accounting team does exactly that.

Official sources

Frequently Asked Questions