What is a Barter deal?
- A barter deal is a situation whereby 2 parties exchange goods and/or services to each other while there is no (full) monetary compensation. The goods/services received by one party are deemed to be the consideration for the goods/services supplied by the other party.
- The ”consideration” is by definition in kind.
VAT Consequences
- From a VAT perspective, there are 2 taxable transactions. For each of the 2 transactions, the VAT consequences are to be assessed separately.
- Specfic watch-out for teh qualification of the transaction (supply of goods vs services), place of supply, VAT rate applicable to each of the transactions, deduction of VAT, liability of VAT, …
- Invoicing: This also means that both parties needs to issue an invoice for the supply of goods/services to the other party. Hence, 2 invoices are needed even if there is no monetary compensation.
- Reporting: Both transactions are to be reported in the VAT returns of the companies, either a sale or purchase of goods/services
ECJ Cases
- C-33/93
- C-330/95 (Goldsmiths) – Refund VAT in case the remuneration is in kind
- C-174/00 (Kennemer Golf) – An annual subscription fees of the members of a sport association can constitute the consideration for the services
- C-37/08 (RCI Europe) – Supply of services connected with immovable property – Services consisting in facilitating the exchange by owners of rights to occupy holiday homes
- C-549/11 (Orfey Balgaria EOOD) – Liability before services are provided when all details are known and services are accurately described
- C-153/12 (Sani treyd) – Obligation in the event of early payment of full consideration upon the establishment of the right of superficies in exchange for the construction of a residential complex
- C-410/17 (A Oy) -Barter deal – Nature and valuation of the supplies
Selection of articles
- UK VAT on property barter transactions (Pinsent Masons)
- VAT and barter transactions (Tax Adviser Magazine)
- The VAT implications of landlord and tenant barter transactions (CMS)
- Value In Kind (Barter Exchange) – Liable for UAE Vat (GCCFinTax)
For all other newsitems on www.vatupdate.com on Barter Deals/Transactions, click HERE.
