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Personal barter transactions allowed

Trade Secretary Ramon Lopez clarified that barter transactions on the internet are lawful as long as these are done personally and not performed as part of a business.

Sec. Lopez said bartering, which he described as “the world’s oldest form of trade,” was “regulated under Executive Order (EO) 64 signed by President Rodrigo Duterte in 2018.”

The order “also established the Mindanao Barter Council, tasked to supervise and coordinate barter activities in the Philippines,” he added.

“This EO stresses that barter trade is only allowed in three areas, namely in Siasi and Jolo in Sulu and Bongao in Tawi-Tawi. Outside those areas, barter trading across borders is not allowed,” said the Trade chief.

“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,” he explained.

While there is no clear prohibition for local barter trading, these are still subject to regulation and must be registered, he added.

“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,” Lopez said, adding that this also applied to online transactions.

He emphasized that local barter trade activities with gross sales of less than P3 million a year may avail of exemption from value added tax (VAT).

“DTI would like to clarify that personal transactions not in the course of trade and business are not covered by registration requirements,” Lopez said.

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