On 3 November 2023, the UAE introduced the new Ministerial Decision 265 of 2023, to replace the previous Ministerial Decision 139 of 2023, which came into effect from June 1, 2023. This change offers relief for traders operating in non-designated free zones, such as global entities established in DMCC.
Ministerial Decision No. 265 lists the trading of Qualifying Commodities as a Qualifying Activity, for 0 per cent corporate tax rate for income generated from physical trading of various commodities on recognized stock exchanges. It also covers derivative trading income used for risk hedging in such trading activities.
Furthermore, the Ministerial Decision provides clarity on the scope of Qualifying and Excluded Activities, offering transparency to free zone businesses.
‘Trading of Qualifying Commodities’
Trading of Qualifying Commodities refers to the physical trading of qualifying commodities and associated derivative trading used to hedge against the risks involved in these activities. Qualifying Commodities include: metals, minerals, energy, and agricultural commodities traded in their unprocessed form on a Recognized Commodities Exchange Market.
