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MMFLau(Initiate)Initiate
25 Oct 2024

Hi there


A tax invoice from an overseas vendor (with ABN and registered for GST) in foreign currency (EUR). The tax invoice stated the exchange rate as on the date of the invoice. We pay this overseas vendor in EUR.


When we process the tax invoice, our system SAP will use the spot rate (on the invoice date) from SAP to calculate the AUD amount. To prevent forex hedging we are not allowed to change the spot rate in SAP.


My question is: From the taxation perspective, is this okay for us to just go with the spot rate (using the invoice date) provided by SAP, and ignore the exchange rate stated on the invoice? Or should we ask the vendor to remove the exchange rate from the invoice, and when we process the invoice, we just ensure we put in the invoice date for SAP to work out the spot rate?


Many thanks


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3 replies
241 views
3 replies

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Most helpful replyATO Certified Response

CaroATO(Community Support)Community Support
ATO Certified Response28 Oct 2024

Hi @MMFlau,


We've specific rules around this kind of thing. There're 2 options you can choose from. You can use either the exchange rate on the date the transaction took place or an average rate.


Keep in mind, it's not up to the vendor to choose the exchange rate. If the transaction took place on the date the invoice was issued you can use the Reserve Bank of Australia exchange rate. If you don't want to use this rate, there's always the average rate available.

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Most helpful replyATO Certified Response

CaroATO(Community Support)Community Support
ATO Certified Response28 Oct 2024

Hi @MMFlau,


We've specific rules around this kind of thing. There're 2 options you can choose from. You can use either the exchange rate on the date the transaction took place or an average rate.


Keep in mind, it's not up to the vendor to choose the exchange rate. If the transaction took place on the date the invoice was issued you can use the Reserve Bank of Australia exchange rate. If you don't want to use this rate, there's always the average rate available.

MMFLau(Initiate)Initiate
30 Oct 2024

Thanks @CaroATO,


When you say the date the transaction took place, do you mean the date that we process the invoice? Eg, the invoice date is 25/09/2024 and I process the invoice in SAP on 04/10/2024. So, in this case can I use an exchange rate on 04/10/2024? Because SAP won't allow me to change the exchange rate back to 25/09/2024.


Many thanks

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