With over 56,000 Australian businesses exporting goods or services internationally, it has become increasingly common to invoice overseas customers in foreign currencies. But doing so comes with specific goods and services tax (GST) rules.

The Australian Taxation Office (ATO) expects every invoice in a foreign currency to tie back cleanly to values in Australian dollars (AUD) for the lodgement of business activity statements, also called BAS statements. If your business works with international buyers, operates in industries that use global pricing, or runs an online storefront with a multicurrency checkout, your invoicing and accounting systems need to handle currency conversion with precision.

Below, you’ll learn how to invoice in foreign currencies and stay GST-compliant in Australia.

What’s in this article?

• What does it mean to invoice in foreign currencies?
  
• How should businesses convert foreign currency amounts for GST reporting?
  
• How does GST apply when invoicing in a foreign currency?
  
• What challenges arise when invoicing in foreign currencies?
  
• How can businesses structure their accounting systems to handle foreign currency invoicing?
  
• How Stripe Invoicing can help
  

What does it mean to invoice in foreign currencies?

In Australia, issuing an invoice in a foreign currency means billing a customer in something other than AUD. Australian businesses might invoice in foreign currencies in order to support how customers buy or fit the norms of a particular industry.

It’s common under these conditions:

• Ecommerce and online sales: Online stores and digital platforms often present prices in the shopper’s currency to simplify checkout. The backend still settles in AUD, but the buyer sees a familiar number upfront.

• Exporting goods and services: Australian exporters often invoice in the buyer’s currency. It’s also common to invoice in USD because many global markets anchor pricing in that currency, especially in the resource, energy, and agricultural sectors.

• Working with international clients: Service businesses frequently invoice overseas clients in the client’s home currency to speed up cross-border payment approvals.

• Domestic sales tied to global pricing: Some industries invoice Australian customers in foreign currencies, especially USD, when their contracts are tied to international benchmarks. This is uncommon in consumer transactions but normal in many commercial agreements.

• Intercompany or cross-border internal billing: Companies with foreign subsidiaries often invoice internal fees in the subsidiary’s operating currency. This keeps the company’s books cleaner while the Australian entity handles the AUD conversion for compliance.

How should businesses convert foreign currency amounts for GST reporting?

Because GST must be reported in AUD on business activity statements, businesses that invoice in foreign currencies must account for those transactions in AUD. When GST applies, an invoice must either show the value of that tax in AUD or include enough detail to calculate it (e.g., by providing the exchange rate used) so that the ATO can verify it.

Here are some elements of proper conversion:

• Use an approved exchange rate source: The ATO allows the use of rates from the Reserve Bank of Australia (RBA) or a major bank. You can also use a rate you’ve formally agreed on with a customer. Pick one method and use it across all transactions.

• Determine the correct conversion day: Businesses using cash accounting can convert on the invoice date, the transaction date, or the payment date. Accrual-basis businesses convert on the invoice date or payment date—whichever is earlier. Consistent timing prevents mismatches.

• Apply the conversion formula: Convert into AUD by multiplying the foreign amount by the inverse of the exchange rate. This converted figure becomes the basis for GST calculation and reporting.

• Calculate GST in AUD: If the sale is taxable, compute GST using the AUD-converted amount, not the value in foreign currency. The GST you report on your BAS must always be in Australian dollars.

• Record and document the rate used: Log the exact exchange rate applied for every transaction with evidence, such as an RBA rate snapshot or a bank statement showing the rate. This audit trail protects you if the ATO reviews your BAS.

• Line up your accounting system with your conversion method: Make sure your software captures both the foreign amount and the AUD equivalent on the correct date, so that GST totals, revenue reporting, and reconciliation all match up.

How does GST apply when invoicing in a foreign currency?

To figure out whether GST applies, focus on where the supply is consumed. Once you know whether the sale is domestic or an export, GST treatment becomes clear.

Here’s how it breaks down:

• GST on sales to Australian customers: A GST of 10% is applied to domestic sales, regardless of the invoice currency. The invoice must show the GST amount in AUD or contain all the information necessary to calculate it.

• GST on sales to overseas customers: Exports of goods and services are generally GST-free, even if the invoice is in a foreign currency. In these cases, you’d issue a standard invoice with no GST, and keep evidence that the sale qualifies as an export.

• Exceptions for overseas customers: Some cross-border services are taxable if they are connected with Australia through specific legal tests under the GST Act. If the work is performed in Australia for use in Australia, you must charge 10% GST and issue a tax invoice that meets all Australian requirements, even if the customer is not a resident.

What challenges arise when invoicing in foreign currencies?

Foreign currency invoicing adds complexity to the invoicing process.

Here’s what to look out for:

• Exchange rate movement: Because currency values shift constantly, the AUD value of a foreign currency receivable can rise or fall before the customer pays. Those swings can create gains or losses that must be tracked and reconciled.

• Uncertain AUD cash flow: Even when a customer pays the exact foreign currency amount, you might end up with more or less AUD than you expected. That unpredictability in payments can make short-term budgeting harder, especially for businesses with long payment cycles or thin margins.

• Accounting complexity: Multicurrency bookkeeping requires accurately capturing exchange rates, tracking in dual currencies, and properly handling foreign exchange (FX) differences. Mistakes can ripple into GST reporting and financial statements.

• Bank fees: International payments often involve conversion fees, wire transfer charges, and bank-set exchange rates that differ from those used for GST. These differences must be reconciled.

• Inconsistency in GST treatment: For tax invoices in foreign currencies, teams must remember to show GST in AUD or to include the required conversion details. Omitting this information can make your BAS inaccurate and cause problems for customers claiming GST credits.

• Ongoing FX exposure: Businesses that invoice regularly in a volatile currency might need policies—or sometimes hedging strategies—to keep exchange rate swings from distorting results. Simple steps, such as shortening payment terms or settling quickly, can help manage exposure.

How can businesses structure their accounting systems to handle foreign currency invoicing?

There’s a lot to keep track of with multicurrency invoicing. But a solid accounting setup will give you a predictable workflow and help you avoid common GST mistakes.

Here’s what you can do:

• Use accounting software with multicurrency support: Systems that store both the foreign currency amount and the AUD-converted value automatically handle any revaluations. This reduces manual errors and creates a consistent audit trail for GST and financial reporting.

• Integrate invoicing and payment tools: Payments providers such as Stripe can issue invoices and process payments in many currencies, then sync the resulting payments back to your accounting system in AUD. This keeps your books lined up with real settlement values and simplifies reconciliation.

• Set an internal policy for exchange rates: Document which exchange rate source and conversion day you use, and how GST should appear on foreign currency invoices. A written playbook keeps things consistent.

• Maintain bank accounts in foreign currencies: Holding all the major currencies you regularly transact in can reduce conversion fees and let you choose when to convert to AUD. It also makes reconciliation easier when payments settle directly in that currency.

• Reconcile frequently and review differences: Regular reconciliations catch misapplied rates, missing AUD values, and FX gains or losses that need to be recorded. Reviewing will keep your BAS, revenue reporting, and cash positions accurate.

How Stripe Invoicing can help

Stripe Invoicing simplifies your accounts receivable (AR) process—from invoice creation to payment collection. Whether you’re managing one-time or recurring billing, Stripe helps businesses get paid faster and streamline operations:

• Automate accounts receivable: Easily create, customize, and send professional invoices—no coding required. Stripe automatically tracks invoice status, sends payment reminders, and processes refunds, helping you stay on top of your cash flow.

• Accelerate cash flow: Reduce days sales outstanding (DSO) and get paid faster with integrated global payments, automatic reminders, and AI-powered dunning tools that help you recover more revenue.

• Enhance the customer experience: Deliver a modern payment experience with support for 25+ languages, 135+ currencies, and 100+ payment methods. Invoices are easy to access and pay through a self-serve customer portal.

• Reduce back-office workload: Generate invoices in minutes and reduce time spent on collections through automatic reminders and a Stripe-hosted invoice payment page.

• Integrate with your existing systems: Stripe Invoicing integrates with popular accounting and enterprise resource planning (ERP) software, helping you keep systems in sync and reduce manual data entry.

Learn more about how Stripe can simplify your accounts receivable process, or get started today.