TAXATION AND BARTERCARD

Members should treat a Trade Dollar as they would a cash dollar from a tax perspective. Barter transactions are assessable and deductible for income tax purposes to the same extent as other cash or credit transactions.  Therefore, the advantages and disadvantages are similar to ordinary cash revenue or expenses.

Trading may result in tax liability when selling and attract tax credit when purchasing. It may also involve the Fringe Benefits, Sales Tax and Capital Gains Legislation. The Australian Taxation Office has expressed its views in Taxation Ruling IT 2668 on the taxation consequences of Trade transactions.

"When an entity that is a member of a Trade Exchange makes a taxable supply to another member, there is a liability for tax, including goods and services tax (GST)."

For tax purposes, the Australian Taxation Office considers one Trade Dollar (T$1) equal to one Australian dollar ($1).  For the purposes of the tax laws, payments such as GST, income tax and the superannuation guarantee levy must be remitted to the Australian Taxation Office in Australian currency.

Trading is not designed to be used as a means of tax evasion or avoidance. Bartercard members should treat sales and deductible purchases as they would treat a cash transaction. Opening a Trade account is similar to opening another bank or credit card account.

As the third party record keeper, Bartercard Pty Ltd has a legal obligation to provide information, upon request, concerning members' trading activity to any government department.

Further information about the Australian Taxation Office’s stand on barter can be found here