Bartercard is a barter trading exchange. It is the largest in the world. Bartercard enables member businesses to exchange goods and services with other member businesses without using cash or cash equivalents, or having to engage in the direct two-way swap of goods and/or services.
In 2007, Bartercard Australia was sold in a management buyout. Currently, Bartercard continues to operate in 6 countries (Australia, New Zealand, the UK, Thailand, UAE and Cyprus).
Bartercard provides members with a line of credit which they can use to make purchases immediately, saving the business owners cash. Members earn Bartercard Trade Dollars for the goods and services they sell and this value is recorded electronically in the member’s account database, or goes towards repaying the credit that the member may have used.
Bartercard is a major sponsor of the Bartercard Cup, the top level rugby league club competition in New Zealand, and sponsors many other business and sporting organisations.
Trade exchanges require members who participate in a transaction to pay to the exchange a proportion of the nominal value of the price in cash. The rules vary, but can be seen at the websites of the exchanges.
Contents |
For taxation purposes, that is, for calculating taxation liability, the Australian Taxation Office (ATO) treats one Bartercard Trade Dollar as if it were one dollar in legal currency. It also treats other, similar, "barter credits" - for example, EBanc, Contrabart - as if each "barter credit" were one dollar in legal Australian currency. The revenue authorities of the Australian States treat "barter credit" in the same way.
The Australian Taxation Office[1] warns the trustees of self-managed superannuation funds that the acquisition of "barter credits" might very well cause the fund to become non-complying. Similarly, the ATO states at the above site that an employer will not comply with its obligations to make contributions to employee superannuation if it makes the contributions in "barter credits."
In fact, the ATO states that "It may also be difficult for trustees to establish a market value for the fund’s assets in situations where barter credits are held." That statement directly contradicts the proposition that the ATO "recognises" that a "Bartercard Trade Dollar" has "the same value as the Australian Dollar." ATO Interpretative Decision ID2003/138[2] contains statements to the same ultimate effect.
The ATO has issued two interpretative decisions on the subject. ID2003/138 has already been mentioned.
In ID2003/137[3], the ATO says (in part) about the acquisition of "money" by a superannuation fund: