How is loss on variation of foreign currency (international tax) reported and is it tax deductible?

 Author: RachelATO(Community Moderator)Community Moderator

14 Apr 2026

Hi @DJC123,

Foreign exchange losses may be tax deductible, but this depends on the nature of the loss and when it's realised.

Losses from currency fluctuations are brought to account when they're realised, which occurs when your client:

• disposes of foreign currency or a right to such currency
• ceases to have a right to receive or pay foreign currency, or
• ceases to have an obligation to pay or receive foreign currency.

Some forex losses aren't deductible. For example, you can't claim a deduction for losses that are of a private or domestic nature or relate to exempt income.

We have some info you can read through on foreign exchange gains and losses. We set out the tax rules on the disposal of, or rights or obligations to receive or pay, foreign currency.

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