United Arab Emirates Tax Agency Clarifies Application of VAT for Supplies in Barter Transactions

The Emirati Federal Tax Authority April 28 issued Public Clarification No. VATP042, clarifying the application of VAT for supplies in barter transactions. Topics covered include: 1) that a supply within a barter transaction may be subject to the standard 5 percent VAT rate, subject to the zero percent VAT rate, exempt, or outside the scope of UAE VAT; 2) the applicable principles to determine the market value of the nonmonetary part of the consideration in barter transactions; 3) that the specified rules regarding the valuation of supplies must be applied by both parties to the supplies they make as part ...