Are losses on variations in foregin currency tax deductible?

 Author: RachelATO(Community Moderator)Community Moderator

6 May 2026

Hi @Thomas_Clarke,

Yes, foreign exchange losses can be tax deductible. When you pay USD expenses for your business and the exchange rate fluctuates, the loss attributable to that currency variation is brought to account when it's realised.

Currency conversion fees charged by your bank (such as the 2% transaction fee you mentioned) are also deductible as a business expense, provided they relate to earning your assessable income from the business.

Some forex losses aren't deductible. These include losses of a private or domestic nature, or those relating to exempt income.

If you operate your business, you'd include all your foreign exchange losses when calculating your business net income or loss at the business section of your tax return. You'll need to convert all foreign currency amounts to Australian dollars when preparing your return.

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