Personal “Online Barter” Allowed: DTI

The Department of Trade and Industry (DTI) Secretary Ramon Lopez has clarified on July 15 that personal online barters are not taxable and not covered for registration.

Exchanging used personal items for food or other goods as long as it is not done in the course of earning a living or a regular business is considered a personal transaction and is not covered by registration requirements according to DTI.

This clarification comes as recent news of DTI saying online barters are illegal has been making rounds online.

In the Executive Order (EO) No. 64 signed by President Rodrigo Duterte in 2018, the barter system is only allowed in Siasi and Jolo in Sulu and Bongao in Tawi-Tawi which is under the monitoring of the Mindanao Barter Council.

“This EO stresses that barter trade is only allowed in three (3) areas, namely in Siasi and Jolo in Sulu and Bongao in Tawi-Tawi. Outside those areas, barter trading across borders is not allowed,” DTI Secretary Lopez said in a press release.

Outside these areas, barter is illegal especially those that are done online or done as a regular business.

“This is what I meant as illegal—those done in other areas or if done online and cross border, or as a regular business in the course of trade—as these are not registered and not taxed,” Lopez added.

DTI Secretary Lopez also said that if the barter is done in the course of a regular trade or business it shall be taxed and registered.

“For local barter trade, while there is no clear prohibition, these are still subject to regulation and must be registered. The Department of Trade and Industry (DTI) emphasizes that this is subject to tax if it is being done in the course of regular trade or business. This is also applicable for online transactions. However, local barter trade activities with less than Php3 million gross sales per year may avail of value-added tax (VAT) exemption.” Lopez said.

The barter system may be the oldest form of trade but is gaining traction once again through “online barter” communities during this community quarantine. (ASC)