In general, taxable persons receive monetary consideration for the supplies they make but consideration may also be received in the form of goods or services, i.e. non-monetary consideration.
Transactions which involve the exchange of goods and/or services, are known as barter transactions.
This Public Clarification clarifies the VAT treatment of barter transactions.
Barter transactions involve at least two supplies, i.e. each party makes a supply to the other.
Such supplies are subject to the general VAT rules, nevertheless, special valuation rules apply.
Generally, the value of the supply is the consideration less the tax amount.
The value of supply within a barter transaction is the market value of the non-monetary consideration received by a supplier excluding the tax amount.
Where a supplier receives both monetary and non-monetary consideration, the value of supply is the monetary part plus the market value of the non-monetary part of the consideration, excluding the tax amount.
The VAT treatment of a barter transaction is the same as that of a ...