- Barter Transactions and VAT Treatment: The document clarifies the VAT treatment for barter transactions, where goods or services are exchanged instead of monetary payment. Each party in a barter transaction makes a supply to the other, and these supplies are subject to general VAT rules, with special valuation rules applied to determine the value of the non-monetary consideration.
- Valuation of Supply: In barter transactions, the value of the supply is determined by the market value of the non-monetary consideration received, excluding the tax amount. If both monetary and non-monetary considerations are received, the value is the sum of the monetary part and the market value of the non-monetary part, excluding tax.
- Tax Invoices Requirement: Registrants making taxable supplies under a barter agreement must issue tax invoices to each other. This requirement applies when both parties are registrants and make taxable supplies to each other, ensuring proper accounting for VAT on both monetary and non-monetary parts of the transaction.
Source gov.ae
