The Federal Tax Service issued guidance on the applicable tax treatment regarding the supply of goods and services through the barter system. According to the explanation, such operations are subject to tax on the added value (VAT) based on the cash value of the goods or services involved in the barter deal. "In accordance with the legislation on VAT, the exchange of goods or services is a premise for taxation, and the tax should be based on the market value of the goods or services specified in the deal, provided that these operations are carried out within the framework of economic activity," it is stated in the official statement. Thus, companies conducting analogous transactions must correctly account for VAT based on the cash value of the goods or services in the barter deal.
