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Paw117(Newbie)Newbie
5 May 2026

Hello, I am preparing a tax return for a client who operates a small tour business. She paid overseas suppliers in CNY for a Beijing tour package. Due to exchange rate movements between the invoice date and payment date, she incurred a foreign exchange loss. Is this forex loss deductible under Div 775 ITAA 1997?

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1 replies
15 views
1 replies

All replies

KaraATO(Community Support)Community Support
6 May 2026

Hi @Paw117,


Yes. A foreign exchange loss may be deductible where it arises from a forex realisation event under Division 775 of the ITAA 1997, and the transaction is connected with carrying on the business.


We’ve provided guidance on another post if you wanted to have a read.

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Is a foreign exchange loss from paying overseas suppliers deductible for a small business? | ATO Community