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July 15, 2009 at 7:59 am #965176Up::0
If there are any accountants or similar reading this … how do you declare income in other currencies? Do you have to convert it?
For example,
I have all my normal Australian bank accounts.
I also have a PayPal account which I keep a small amount in – it varies but let’s use an example of AUS$1000 and US$600.An overseas client prefers to be billed and pay in US dollars.
I don’t mind keeping both Australian and US dollars in my PayPal account -but they stay separate currencies unless I convert the US dollars to Australian dollars. I don’t mind having some US dollars so that I can purchase direct from other companies without having the conversion problem.
How do I declare it as income? Do I have to estimate the Australian dollar value of the US dollars at the time I got paid for the service? Do I have to convert it immediately or at all? (There is no GST on the overseas accounts as they are technically small exports.)
I can’t seem to find any relevant info on this.
Thank you.
July 15, 2009 at 11:32 am #1010591Up::0Hi, I can’t answer much of that for you. But I think the tax dept should have monthly currency rate conversion figures somewhere. Using those you can work out you overseas income in AUD for each month.
Sorry that is about all I know, or don’t know on that!
July 15, 2009 at 6:43 pm #1010592Up::0The ATO website is helpful – the link
http://www.ato.gov.au/corporate/content.asp?doc=/content/64490.htm
gets you to
Converting foreign income to Australian dollars
I searched “overseas currency” at the front of the ATO site. ATO also have the conversion rates.
I’m pretty sure you also need to put the balance in $A in your balance sheet at year end, but NZ has some odd rules on the exchange rate movements which I won’t bore you wth.
July 15, 2009 at 10:57 pm #1010593Up::0Thank you Denise and Mexham – I did find that page on the ATO myself last night – my main query was did I physically have to convert those dollars or was it ok to work it out and just leave them as US dollars in my account. It appears I can estimate the conversion as long as I follow their guidelines.
I will double-check with my own accountant in a few weeks when I send my own tax in although this query is for the new financial year, not the one we are currently doing tax for.
July 16, 2009 at 1:43 am #1010594Up::0Re: Australian and US dollars in PayPal and declaring income- SOLUTION FOUND
SOLUTION FOUND
I just spoke to 3 lovely people at the ATO. http://www.ato.gov.au
Any overseas service transactions are considered export of services and attract no GST. In the BAS they are C1 and C2 (nothing from 1a).
Example:
I sell a artwork service to an international customer in US dollars for USD100.
If I choose to keep the payment in US dollars in my PayPal account, I have to choose a regular date to make an estimate to Australian dollars. eg on the day, or end of month etc. But always make it consistent and have something to show how I made the calculation. It does not attract GST.They also referred to rulings GSTR 1001/2 and GSTR2000/31 to read more.
The only two currencies I deal with are Australian dollars and US dollars so that actually is easier to understand for me.
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