Trade Secretary Ramon Lopez clarified that local barter for personal transactions are not required to register so as long as it is not done as a regular trade and business. What he stated as illegal are barter trade which cross borders and done online and not registered.

Read full statement below.

CLARIFICATORY STATEMENT OF SECRETARY RAMON M. LOPEZ ON ONLINE BARTER TRADE

Barter is the world’s oldest form of trade and is regulated under Executive Order (EO) No. 64 signed by President Rodrigo Roa Duterte in 2018. The EO also established the Mindanao Barter Council, tasked to supervise and coordinate barter activities in the Philippines.

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.

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.

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.

On the other hand, DTI would like to clarify that personal transactions not in the course of trade and business are not covered by registration requirements.

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