Goods and Services Tax: Foreign Currency Conversion Determination 2018

Legislative Instrument

Goods and Services Tax: Foreign Currency Conversion Determination 2018

I, Timothy Dyce, Deputy Commissioner of Taxation, make this Determination under subsection 9-85(2) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Timothy Dyce

Deputy Commissioner of Taxation

Dated: 30 May 2018

Name of determination

This determination is the Goods and Services Tax: Foreign Currency Conversion Determination 2018.

Commencement

This determination commences on 1 July 2018.

Repeal of previous determination

This determination repeals and replaces the Goods and Services Tax: Foreign Currency Conversion Determination (No. 1) 2017 (the previous determination) - F2017L00845, registered on 30 June 2017.

Application

This determination applies to an entity that works out the value of a taxable supply in Australian currency using the method in section 5, because an amount of the consideration for the supply is expressed in a foreign currency.

Manner in which an amount of consideration for the supply is worked out

You can convert the amount of consideration expressed in a foreign currency using the following formula:

amount expressed in a foreign currency

x

1

your particular exchange rate on the conversion day

You must use your particular exchange rate consistently.

Definitions

agreed rate means a particular rate agreed to between a supplier and a registered recipient. The agreed rate only applies for supplies made under the agreement and for the period of the agreement. Where the supplier and recipient are associates, the agreed rate must reflect the rate agreed to by parties dealing at arm's length.

conversion day is the date you use to convert foreign currency into Australian currency under this determination:

when you account for GST on a basis other than cash your conversion day is the earlier of:

the day on which any of the consideration is received for the supply (the receipt date); or

the transaction date or the invoice date (whichever you have chosen).

when you account for GST on a cash basis, your conversion day is:

the transaction date; or

the invoice date; or

the day on which any of the consideration is received for the supply.

if you are a non-resident that is not a limited registration entity, and you are making inbound intangible consumer supplies, offshore supplies of low value goods, or both, your conversion day is:

a day specified in either paragraphs (a) or (b) of this definition for any types of supplies that you make (including inbound intangible consumer supplies or offshore supplies of low value goods); or

for your inbound intangible consumer supplies, offshore supplies of low value goods, or both, the final day of the relevant tax period in which GST is payable (in which case, the conversion day for your other types of supplies is the day specified in either paragraphs (a) or (b) of this definition).

if you are a non-resident that is a limited registration entity, your conversion day is:

a day specified in either paragraphs (a) or (b) of this definition; or

the final day of the relevant tax period in which GST is payable on your supplies.

exchange rate means the unit of foreign currency per Australian dollar.

foreign currency means a currency other than Australian currency.

foreign exchange organisation means an organisation that provides exchange rates publicly.

RBA business day means a day that the head office of the Reserve Bank of Australia is open for business.

RBA rate means the foreign exchange rate specified by the Reserve Bank of Australia. When you work out the consideration on a conversion day:

that is an RBA business day, then the RBA rate is the unit of foreign currency per $A specified by the RBA as the 4:00pm Australian Eastern time rate on that RBA business day or previous RBA business day, and

that is not an RBA business day, then the RBA rate is the unit of foreign currency per $A specified by the RBA as the 4:00pm Australian Eastern time rate of the previous RBA business day.

Reserve Bank of Australia means the body corporate continued in existence under the Reserve Bank Act 1959.

transaction date means the date you use for foreign currency conversion in your accounting system under the relevant Accounting Standard.

your particular exchange rate is one of the following:

the RBA rate, or

a rate published by a foreign exchange organisation, or

an agreed rate, or

for taxable supplies of offshore supplies of low value goods a rate chosen under Goods and Services Tax: Foreign Currency (Customs Value of Low Value Goods) Determination 2018.

Other expressions in this determination have the same meaning as in the GST Act.