7.2.2 Emotional benefit as a reason for accepting certain conditions

Besides the economic benefit, a reason for entering into a barter deal can be emotional. This usually occurs if a party paying in kind knows that the goods or services that he provides or uses as payment are (probably) worth more than the goods or services that he gets in return, but he goes ahead with the deal anyway because the deal provides him with an emotional benefit. The party paying knows he is actually ‘giving something away’ but he does that because of the emotional connection with the other party involved, e.g. family ties, friendship, because it makes him feel good. Building on the earlier example of the artist with a bar debt, it could also be possible that the bar owner accepts the artist’s painting instead of money because they are befriended or because he pities the artist. Obviously, ‘giving something away’ can also have other than emotional reasons, e.g. business reasons, as I describe in Chapter 6.

The emotional benefit is not (necessarily) a reason for bartering as such, but rather for accepting the terms to a specific barter transaction. The same applies to situations where someone would pay a higher price in money than he considers the supply he receives to be worth objectively.

An example of this ‘reason for entering into a bargain transaction’ is the owner of a clothes shop that is also the proud father of a boy that plays in a local football team. He decides to provide the whole team with tracksuits from his shop, provided that the name of the shop is printed on the back and that all of them always wear them to games. This is bartering goods (track suits) for services (advertisement), although the value of the advertisement does not necessarily cover the cost of the tracksuits. The fact that it is his son (and his son’s team) that he helps out makes him feel good.

However, in my view this ‘emotional benefit’ is not the reason for him to enter into the barter transaction but rather the reason for accepting the terms to the specific barter transaction. He could also have donated money or paid more money for the advertisement than it would have been worth, although in my view this latter scenario is not as likely to occur as an ‘uneven’ barter deal because of the extra effect of the economic benefits of a barter transaction as described above.

Giving something (goods, expertise, labour, etc.) out of generosity or for charity, where the barter deal does not include more than obtaining an emotional benefit in return might be considered an example of a transaction concluded purely for the emotional benefit. However, in my view this is not a barter transaction, because the provider of the goods, expertise, labour etc. does not actually get something in return from the recipient. His emotional benefit is purely a product of his own mind (psyche). All supplies and/or payments (the goods, expertise, labour, etc. as well as the ‘positive feeling’) are made by the same party involved in this transaction, which therefore is not a barter transaction but a donation or a gift.

From the above it is, in my view, clear that the emotional benefit can be an important factor in barter transactions because it can affect the terms of such a transaction. Because Member States are allowed to implement rules under which the taxable amount has to be adjusted for specific transactions in which related parties are involved, the ‘emotional’ element can be relevant for this research.