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1. Home AboutUs  OurServices Industry Insights ContactUs Blog BookAppointment Business Setup & PRO Services VAT & Audit & Assurance Business Consulting CFO & Accounting Investment & Corporate Finance IT Advisory & Product Compliance & AML Services Corporate Tax HOME BLOG VATPUBLICCLARIFICATIONONVALUEOFSUPPLYUNDERBARTERTRANSACTIONS DhirajSankhi Head Finance & Audit functions and oversight over Governance, Compliance, Investment, Treasury, Risk, Admin & HR, Procurement.    ACCOUNTING BUSINESS CONSULTING CORPORATETAXSERVICES MAY 3, 2025 VATPublicClarificationonValueofSupplyunderBarter Transactions Categories (6) ACCOUNTING th On 28 April 2025, Federal Tax Authority (FTA) have issued VAT public clari?cation (TAXP042) on value of supply under Barter Transactions (7) AUDIT CONSULTANT (15) BUSINESS Barter Transactions: Taxable persons receive monetary consideration for the supplies they make but consideration (1) COMPLIANCE SERVICES may also be received in the form of goods or services, i.e. non-monetary consideration. Transactions which involve (15) CONSULTING the exchange of goods and/or services, are known as barter transactions. (2) CORPORATE GOVERNANCE Barter transactions involve at least two supplies, i.e. each party makes a supply to the other. Such supplies are (7) CORPORATE TAX SERVICES subject to the general VAT rules, nevertheless, special valuation rules apply (1) ERP ADVISORY SERVICES Public clari?cation TAXP042: Underlying clari?cation explains the principles to determine the value of supply for (5) FINANCE the non-monetary part of the consideration. The following principles apply (1) MARKETING RecentPosts CommonMistakes whenChoosingtheBest AccountingFirmin Dubai, UAE MAY 8, 2025 VATPublicClarification onValueofSupply underBarter Transactions MAY 3, 2025 

2. InitiativefortheWaiver ofPenaltiesforLate CorporateTax Registration MAY 2, 2025 Tags ACCOUNTINGANDBOOKKEEPING COMPANIESINUAE ACCOUNTINGCOMPANYINABUDHABI ACCOUNTINGFIRMINUAE ACCOUNTINGFIRMIN  BUSINESSBAY DUBAI ACCOUNTINGFIRMSINABUDHABI 1. The market value of a supply of goods or services is the monetary consideration the supply would generally AUDIT & ASSURANCECONSULTANTIN UAE achieve if supplied in similar circumstances at that date in the UAE, being a supply freely made between persons AUDITANDASSURANCECONSULTANT INUAE who are not connected in any manner 2. Where the market value could not be determined as per principle 1 above, the market value is the monetary AUDITFIRMINABUDHABI consideration which a similar supply would achieve if supplied in similar circumstances at that date in the UAE, AUDITFIRMINDUBAI being a supply freely o?ered and made between persons who are not connected in any manner. 3. Where the market value could not be determined as per principles 1 and 2 above, the market value shall be BESTCONSULTANTSFORVATINDUBAI determined by reference to the replacement cost of identical goods or services, with such supply being o?ered by BESTCORPORATETAXCONSULTANTSIN ABUDHABI a supplier who is not connected to the recipient of goods or recipient of services in any manner BESTCORPORATETAXCONSULTANTSIN DUBAI Example: A consulting ?rm and IT ?rm, which are registrants, enter into a barter agreement, as per the following: BUSINESS BUSINESSACTIVITIESINUAE IT ?rm will provide software’s like ERP, HR worth AED 35,000 Consulting ?rm will provide auditing services worth AED 15,000 and Balance AED 20,000 in cash BUSINESSCONSULTANTINDUBAI BUSINESSCONSULTINGFIRMSINDUBAI VAT Treatment BUSINESSINDUBAI In the above example, IT ?rm should raise Tax invoice for AED 35,000 inclusive of VAT to consulting ?rm BUSINESSSETUPCONSULTANTINDUBAI Consulting ?rm should raise Tax invoice for AED 15,000 inclusive of VAT to IT ?rm BUSINESSSETUPCONSULTANTINUAE BUSINESSSETUPCONSULTANTS BUSINESSSETUPCONSULTANTSINUAE BUSINESSSETUPINDUBAI BUSINESSSETUPSERVICESAND CONSULTANTSINUAE COMPLIANCESERVICESINUAE CORPORATEFINANCEADVISORY SERVICESINUAE CORPORATEFINANCESERVICESUAE CORPORATEGOVERNANCE CONSULTANTSINUAE CORPORATETAXPLANNING CORPORATETAXPLANNINGINDUBAI CORPORATETAXSERVICESINUAE ERPADVISORYSERVICES Key take aways: ERPADVISORYSERVICESINUAE VAT treatment/Law implication should be done for each leg of the transaction INTERNALAUDITCONSULTANTSINUAE Taxable person should not net o? the transactions i.e as mentioned in the example IT ?rm should not raise invoice ITADVISORYSERVICESUAE for AED 20,000 (inclusive of VAT) net o? the services received from consulting ?rm MAINLANDBUSINESSSETUPUAE Both the parties in the barter transaction should raise tax invoice for the services/goods provided by them to each  other. MANAGEMENTCONSULTINGCOMPANY INDUBAI Value of a supply needs to be as per the principle mentioned in the public clari?cation

3. REGULATORYCOMPLIANCEUAE Click here to read the o?cial announcement TAXADVISORYSERVICESINDUBAI TAXCONSULTANTINDUBAI VATCONSULTANTSINDUBAI RelatedPosts ACCOUNTING AUDITCONSULTANT BUSINESS FINANCE CommonMistakeswhen ChoosingtheBestAccounting FirminDubai, UAE InitiativefortheWaiverof PenaltiesforLateCorporate TaxRegistration   MAY 8, 2025 MAY 2, 2025 ABOUTUS QUICKLINKS CORPORATEOFFICE CONNECTWITHUS Have Any Questions? Home We establish clear and thorough 2403, The Prism, Business Bay, 0502510288 organizational structures for Dubai, UAE AboutUs decision making as well as risk Industry Mail Us REGISTEREDOFFICE management. dhiraj@thefirst-check.com Insights    2403, The Prism, Business Bay, ContactUs Dubai, UAE Blogs 2025 © All rights reserved Website Promoted and Maintained by Acacious Technologies 