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  • #988505
    Daniel Mitchell
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    Hi all

    I’ve got a number of invoices from suppliers who are GST registered but have invoiced in USD. They operate online which is why they’ve decided USD is appropriate, but it doesn’t seem right to me that they should be charging GST in a foreign currency when I need to then claim it in AUD. The invoice is titled ‘Tax Invoice’ with an ABN and a single value that states ‘GST Inclusive’ and a note at the bottom that states ‘The total price includes GST’ and ‘All prices are in US dollars’.

    Paying this invoice in USD requires currency conversion on my credit card and possibly conversion fees so I don’t know whether I am able to simply use the total converted amount as any fees are probably not claimable. I’ve had a look online and to my limited ability to decipher the GST rulings I think they are required to give me more information to know what to claim –

    Tax invoices

    41. There are specific tax invoice requirements set out in subsection 29-70(1) where a supplier makes a taxable supply. One of those requirements is that the document provides enough information to enable the GST payable to be ascertained. If the value of the taxable supply is expressed in a foreign currency, the requirement for the amount of GST payable to be clearly ascertained will be satisfied where the tax invoice:

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    includes the GST payable in Australian currency; or
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    includes the GST payable in foreign currency and provides sufficient information to the recipient to work out the GST payable on the supply in Australian currency.
    Sufficient information

    42. For there to be sufficient information, the supplier is required to provide the recipient with the information necessary to work out the GST payable on the supply in Australian currency. Examples of sufficient information include:

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    the price expressed in Australian currency; or
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    the value expressed in Australian currency; or
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    the GST payable, price or value expressed in a foreign currency and the conversion rate used by the supplier, or a statement, to work out the GST payable in Australian currency.

    I’m dealing with two suppliers, neither of which allow me to easily speak to somebody who knows anything about the billing, so it isn’t easy to get more information from them. I will ring the ATO if I have to, but if anybody knows anything more about this that would be great.

    Thanks in advance.

    #1167497
    James
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    It’s definitely a confusing one. I also have a few suppliers like this.

    My understanding is that you can claim 10% of the AUD price charged to the credit card, less any bank fees. Hopefully on your bank statement it should be clear what proportion of the total is for fees.

    #1167498
    akagrp
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    Hi Daniel

    The overall treatment would depend on a number of factors, for example if you are using an Accounting Platform that has foreign currency built in

    If your credit card provider shows the International Transaction separately on your statement and finally if you are using accruals or cash accounting

    There are a number of ways to process to get the correct GST Credit from the transaction

    For Eg if you are using an Accounting system with foreign currency features and amount is the same each month, you can post that invoice as a Bill with the GST code based on what it is in US$ and then match payment with credit card payment – this will allow correct GST

    Hope this helps

    #1167499
    Daniel Mitchell
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    Thanks for the replies.

    I do not see the fees listed separately by my credit provider so I plan to process the transaction as if there were none. My concern is that transactions where both parties are GST registered should result in a net value overall to the ATO; the supplier pays and the recipient claims the same value. But in this situation the supplier has paid GST in AUD, converted to USD at some unknown exchange rate, I pay in USD which gets converted back to AUD at a different exchange rate and then claim the GST back which results in a variance of GST. The information I’ve found from the GST legislation is that they need to either provide the GST value in AUD or state the conversion rate they’ve used so that the values are equal. I think the answer is to ring the ATO and find out what they say.

    Thanks

    #1167500
    akagrp
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    Hi Daniel

    You will struggle to get a supplier to provide you with an exchange rate on a Tax invoice in the real world, the ATO will accept the GST amount on date of Issue of the Tax Invoice, thus the reason why an accounting system is handy as will record GST as of that date, exchange rate at time of payment will be allocated to a foreign currency gain/loss account and have no impact to GST

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