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Forex Fee Expense Claim

Newbie

Views 4197

Replies 6

Can I claim as an expense the forex fees that a bank charges on payments from abroad?

EG: If a client of mine (I have a business) in the US owes me US$1,000, pays me that, and the transferring bank then deducts 5% as a forex fee, I am losing that $50’00, and so it is an expense for me, right?

Many thanks for your help.

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Most helpful response

ATO Certified Response

Former Community Support

Replies 4

Hi @AppSmart,

 

Please accept our apologies for the delay in our response. We've checked, and the foreign exchange rate expenses you pay to your bank would be considered to be bank fees, and deductible as a general business expense in your income tax return.

 

Find out more about allowable business expenses in our income and deductions guide for business.

 

Hope that helps! Thanks

 

 

6 REPLIES 6

Former Community Support

Replies 0

Hi @AppSmart,

 

Thanks for getting in touch!

 

We've contacted a specialist are regarding your query and we hope to get back to you with a response as soon as possible.

 

Thanks, JodieH.  

Most helpful response

ATO Certified Response

Former Community Support

Replies 4

Hi @AppSmart,

 

Please accept our apologies for the delay in our response. We've checked, and the foreign exchange rate expenses you pay to your bank would be considered to be bank fees, and deductible as a general business expense in your income tax return.

 

Find out more about allowable business expenses in our income and deductions guide for business.

 

Hope that helps! Thanks

 

 

Newbie

Replies 0

Many thanks Amanda, perfect!

Kind regards

William

I'm new

Replies 2

Hi,

What about banks or companies that are zero fee but build their 'fee' into the exchange rate spread?

For example, perhaps the offical rate is 1.50 ($100 gets $150) but the bank quotes and transfers at 1.45 ($100 gets $145). Essentially, they capture their fee on the spread between the offical rate and the rate they quote.

Is it possible to claim a loss on forex spread due to bank 'fees'?

Thanks

 

 

 

 

Community Moderator

Replies 1

Hi @andrewhparker,

 

We will look into this one for you.

 

KylieS

Community Moderator

Replies 0

Hi @andrewhparker,

 

No. Even though there may be  an identifiable component of the transaction amount that is clearly attributable to a bank fee, the legal nature of this transaction does not involve a bank fee. You also have to account for any gains or losses on the basis that there is no bank fee.

 

A similar outcome applies to interest charged or received. If a bank pays a higher  rate of interest for borrowings but charges no fees then the amount paid by the borrower will be wholly interest and no amount would represent a bank  fee.  
 

 

KylieS