[Glossary](https://pecuvo.eu/en/glossary/) · Money and currencies # Barter **In short:** Barter is the direct exchange of one good or service for another good or service, with no money passing between the parties. **Simply put:** A swap needs a "double coincidence of wants": the other person must have what you want and want what you have. Barter has no common measure of value, is hard to divide and does not store value — an apple goes bad. Money solves exactly these problems. **Example:** A hairdresser cuts a teacher's hair (a €20 service) and he gives her an hour of maths tutoring (also €20). If she does not need tutoring, the deal does not happen — with money it would. **Watch out:** Barter is not "free": it costs time, carries the risk that the other side will not deliver, and makes a fair valuation hard. It is also generally a taxable transaction, even with no money changing hands. > **Example: Bulgaria** — under the VAT Act every supply for consideration is taxable (art. 2, point 1), and in an exchange each of the two supplies is taxable (art. 26(7)–(8)). Source: https://lex.bg/laws/ldoc/2135533201 > > **Check in your country** — ask your tax authority how barter is treated for VAT and income tax. **Source:** Bank of England, "What is money?" — https://www.bankofengland.co.uk/explainers/what-is-money ## In depth in the modules - [Module 6](https://pecuvo.eu/en/modules/alternatives-to-money/) - [Module 1](https://pecuvo.eu/en/modules/history-of-money/) ## Related terms - [History of money](https://pecuvo.eu/en/glossary/history-of-money/) - [Time bank](https://pecuvo.eu/en/glossary/time-bank/) - [Currency](https://pecuvo.eu/en/glossary/currency/) - [VAT (value added tax)](https://pecuvo.eu/en/glossary/vat/)