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Invoicing a client in another currency

You can invoice in any currency. If you charge VAT or GST, part of it must also be in your own. Which rate to use, and how to write amounts no one misreads.

By Harish11 October 20265 min read

You can invoice a client in any currency you both agree on. UK and EU VAT rules say so in as many words, and India’s rules for export invoices set no currency at all. The one exception is tax: if you charge VAT, the VAT total must also be shown in your national currency, converted at a rate the tax authority accepts. If you are not registered for VAT or GST, the whole invoice can be in dollars, euros or anything else, and the only rule is to make the currency impossible to misread.

The rest of a foreign currency invoice follows the same rules as any other: the same required details, in whatever currency you chose.

Your currency or theirs?

This is a business decision, not a legal one, and it comes down to who carries the exchange rate risk.

Invoice in your currency and you know exactly what you will receive. Your client carries the risk that the rate moves before they pay, and pays any conversion fee on their side.
Invoice in theirs and you are easier to pay, which matters to a large client with a fixed payment process. You carry the risk, and the conversion fee lands on you when the money arrives.

One common approach is to quote in the client’s currency to make buying easy, and build a margin into the rate for the conversion. Whatever you choose, agree it before the work starts. An invoice that surprises a client with a currency they did not expect is an invoice that waits.

Make the currency impossible to misread

The dollar sign alone is used by the United States, Canada, Australia, New Zealand, Singapore, Mexico and more. “$1,200” on an invoice to a Canadian client from an American freelancer is ambiguous, and an accounts team will either email you to ask or guess.

Three habits remove the doubt:

Use the three letter ISO code somewhere on the invoice: USD, CAD, AUD. It is what banks and accounting systems use, and every accounts team reads it.
State the total with the code, for example “Total due: USD 1,200.00”.
Watch the decimal separator. “1.200,00” is twelve hundred in Germany and “1,200.00” is twelve hundred in the US. Writing the code next to the amount does not fix this, so write amounts in the convention of the reader when you can.

Some currencies have no minor unit in practice. Japanese yen is written without decimals, so an invoice for ¥120,000 should not say ¥120,000.00.

If you charge VAT: what must be in your own currency

UK

HMRC allows a VAT invoice in any currency, with one line fixed. In VAT Notice 700, the net amounts and the total excluding VAT “can be expressed in any currency”, but the total amount of VAT “must be expressed in sterling”. If you invoice in a foreign currency, you convert the VAT total into pounds.

The rate you convert at is set in section 7.6 of the same notice, which has the force of law. You can use:

the UK market selling rate at the time of the supply, which is the default
HMRC’s own period rates, published for customs purposes, which you can switch to without asking but cannot then switch away from without HMRC’s written agreement
another commercial rate, but only with HMRC’s written approval

Whichever you use, it is the rate on the date of the supply, not the date you are paid.

EU

The VAT Directive, Article 230, says the amounts on an invoice “may be expressed in any currency, provided that the amount of VAT payable or to be adjusted is expressed in the national currency of the Member State”. So a French business can invoice a Swiss client in francs, as long as any French VAT is also shown in euros.

For the rate, Article 91 uses the latest selling rate on the most representative exchange market at the time the VAT becomes due, and requires member states to accept the latest European Central Bank rate instead. The European Commission’s own explanatory notes add that a member state cannot require you to print the exchange rate on the invoice. Printing it anyway is a courtesy that saves questions.

India

For exports of services, CGST rule 46 does not set a currency, so invoicing in dollars or euros is normal. What it does require is an endorsement on the invoice, in one of two forms, depending on whether you pay integrated tax or export under a bond or letter of undertaking:

“SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS ON PAYMENT OF INTEGRATED TAX”
“SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX”

An export invoice also needs the client’s name and address, and the country of destination. For the value in rupees, rule 34 says the exchange rate for services is “determined as per the generally accepted accounting principles for the date of time of supply”.

How our generator handles currencies

You pick the currency for each invoice from a list of seventeen: the US, Canadian, Australian, New Zealand and Singapore dollars, the euro, pound, Swiss franc, yen, Indian rupee, UAE dirham, Brazilian real, Mexican peso, South African rand and the Danish, Norwegian and Swedish kroner. Your choice is remembered for next time. Each currency uses its own number of decimals, so yen has none.

Amounts are formatted for your browser’s language, which has one effect worth knowing. The same US dollar invoice shows “$1,234.50” from an American browser and “US$1,234.50” from a British one. If you bill abroad in a dollar currency from a country that uses the same sign, add the ISO code to the notes, or to the first line, so the client cannot misread it.

The PDF is drawn with a standard font that cannot show every currency symbol. For the rupee, and any other symbol it cannot draw, the PDF prints the ISO code instead: “INR 1,234.50” rather than “₹1,234.50”. Accounts teams read either.

What it does not do yet is show a second currency. If you are VAT registered and invoicing in a foreign currency, put the VAT total in your own currency, and the rate you used, in the notes, in a line such as “VAT in sterling: £ amount, at the HMRC period rate for the month of supply”. The endorsement for an Indian export invoice goes in the notes too.