Bartering: doing business without spending money

What is business bartering?

Business bartering means entrepreneurs provide each other with products or services without any money changing hands. So without you or your trading partner paying anything. The value of what you provide is equal to what you receive in return. You agree on that value in advance. You can barter with entrepreneurs in the Netherlands and abroad.

Examples of business bartering

Business-to-business trading is possible in many different situations. For example:

• An online influencer demonstrates products on YouTube, Instagram, or another social media channel, and receives products in return.
• A hotel pays its food and beverage suppliers in overnight stays.
• A copywriter does a job for a website designer, who returns the favour by creating the copywriter’s website.
• A plasterer does a job for a garage, and the garage then does maintenance on their van in return.

Advantages of business bartering

Bartering has various benefits:

• You do not spend any money, so you keep more cash in your business.
• You can continue to invest or cover your fixed costs.
• You expand your network and collaborate with established and new entrepreneurs.
• You make use of each other’s knowledge, products or services.

Disadvantages

There are also some disadvantages to bear in mind:

• You do not receive any money, only a product or service.
• You need to assess the value and quality of what you are receiving in return beforehand.
• With new trading partners, it is harder to know what to expect.
• You have administrative obligations, such as a contract and invoices with VAT.

Business bartering in 5 steps

1. Determine the value

Determine together the value of the product or service in euros. Use the normal sales price as a basis. The value of the products or services you barter must be the same for both parties. See the trade as a regular business transaction, so send a quotation and a copy of your general terms and conditions.

2. Set out terms in a contract

Set out the terms in writing. This will help you avoid any problems. You should record at least:

• The company details of both parties.
• The date and signatures.
• A clear description of the goods or services to be bartered.
• The value of the goods or services based on the sales price.
• When the goods or services are delivered or provided.
• The agreement that both parties will send an invoice.

3. VAT when bartering in the Netherlands

Even though you do not exchange money, you must charge VAT You  calculate the VAT on the value of the product or service received. This is how it works:

• Determine the value of the bartered product or service.
• Determine what rate applies: 0%, 9%, 21%, or an exemption.
• Include the VAT in your VAT return.

4. VAT when bartering internationally

If you barter with companies based outside the Netherlands, you will need to comply with international VAT rules.

• When delivering goods within the EU, a VAT rate of 0% applies. Your bartering partner will pay VAT in their own country.
• When delivering most services to businesses in the EU, you must send an invoice without VAT and write btw verlegd (VAT reverse-charged) on the invoice. The business to which you are supplying your service will pay VAT in their country.
• When delivering products outside the EU, you  charge 0% VAT.
• When delivering services to buyers outside the EU, you can use the Netherlands Tax Administration's tool (in Dutch) to check whether the service is taxed in the Netherlands or the other country.

5. Sending invoices

You must send each other an invoice for the goods delivered or services provided, with the regular VAT rate.

• Process the invoice you sent in your accounts as income
• Process the invoice you receive as expenses.
• The result is net zero (neutral) as you offset the invoices against each other.

How do you find suitable bartering partners? 

Business partners you have been working with for some time often make good bartering partners. You know you can rely on each other and what kind of quality you can expect. You can also make new contacts and expand your business network that way.

Sharing economy versus business bartering

Business bartering works differently from sharing-economy platforms. In bartering, you do not pay money for products or services, but do receive a product or service. The sharing economy is about temporary use rather than ownership. You can sometimes ‘pay’ by providing a service in return, but usually you pay with money via a platform. Do you use a shared scooter, for example? Then you pay a fee for it. That is not a barter transaction, but part of the sharing economy.