THE Department of Trade and Industry (DTI) has clarified that barter trading across borders is illegal, while personal barter is allowed and not covered by registration requirements.
According to Consumer Welfare Division chief Fel Lester Brillantes, if the nature of the transaction in online barter communities is personal and not in the course of trade and business, then it is not subject to tax.
"It will not matter kung online ba sya or offline, so long as personal sya between the contracting parties, that's barter. Dili na sya kinahanglan og lisensya, dili na gina-crack down sa DTI," Brillantes said.
In a clarification statement of Trade Secretary Ramon Lopez, he said the Executive Order 64, which established the Mindanao Barter Council, stresses that barter trade is only allowed in three areas, namely: Siasi and Jolo in Sulu and Bongao in Tawi-Tawi.
Outside those areas, barter trading across borders is not allowed.
"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 said.
For local barter trade, on the other hand, while there is no clear prohibition, these are still subject to regulation and must be registered.
The DTI also emphasized that local barter trade 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 P3 million gross sales per year may avail of value added tax exemption.