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Currency exchange and VAT question

  • 22-03-2019 4:08pm
    #1
    craigm
    Registered Users, Registered Users 2 Posts: 10 ✭


    I have a quick question about the correct rate to apply when converting currencies for VAT.

    I have received services from abroad which I have to self account for VAT on, I paid in USD, so I have to currency convert.

    I've heard conflicting information about what exchange rate I use, I have the 3 following scenarios.
    1. The Euro->USD exchange that I paid on the day (this gets complicated because I use revolut for business and already have EUR exchanged to USD, would I use the rate at the point the currency was changed in this scenario?)
    2. The monthly rate listed by revenue, i.e. https://www.revenue.ie/en/customs-traders-and-agents/importing-and-exporting/exchange-rates/2019/february-2019.aspx for Febreuary.
    3. The exchange rate on the day listed by the the central bank here https://www.centralbank.ie/statistics/interest-rates-exchange-rates/exchange-rates
    4. I use surfaccounts who pull in the exchange rate on the day from a Yahoo API feed, is this acceptable? (you'd think so with Irish based accounting software)

    And a natural addendum to this, the purchase invoices I have received from these companies state the price in USD only, do I have to request an invoice that states the cost in Euros?

    Thanks for the help.


Comments

  • #2
    thegolfer
    Registered Users, Registered Users 2 Posts: 346 ✭✭thegolfer


    craigm wrote: »
    I have a quick question about the correct rate to apply when converting currencies for VAT.

    I have received services from abroad which I have to self account for VAT on, I paid in USD, so I have to currency convert.

    I've heard conflicting information about what exchange rate I use, I have the 3 following scenarios.
    1. The Euro->USD exchange that I paid on the day (this gets complicated because I use revolut for business and already have EUR exchanged to USD, would I use the rate at the point the currency was changed in this scenario?)
    2. The monthly rate listed by revenue, i.e. https://www.revenue.ie/en/customs-traders-and-agents/importing-and-exporting/exchange-rates/2019/february-2019.aspx for Febreuary.
    3. The exchange rate on the day listed by the the central bank here https://www.centralbank.ie/statistics/interest-rates-exchange-rates/exchange-rates
    4. I use surfaccounts who pull in the exchange rate on the day from a Yahoo API feed, is this acceptable? (you'd think so with Irish based accounting software)

    And a natural addendum to this, the purchase invoices I have received from these companies state the price in USD only, do I have to request an invoice that states the cost in Euros?

    Thanks for the help.

    It's the central bank firstly, then a method as agreed with Revenue.

    Take the central bank rate, and it's the date of the invoice, not date paid.


  • #3
    craigm
    Registered Users, Registered Users 2 Posts: 10 ✭craigm


    thegolfer wrote: »
    It's the central bank firstly, then a method as agreed with Revenue.

    Take the central bank rate, and it's the date of the invoice, not date paid.

    Hey, thanks for your reply, appreciate it.

    Just to be clear,

    say I'm purchasing something from a supplier in a foreign currency, let's say today, and I pay for it today, I'd use today's exchange rate from the central bank right?

    And if I'm issuing an invoice in a foreign currency for services supplied, say issued today for $1000 USD to be paid for on 31st March I'd use today's exchange rate on the invoice from the central bank correct?

    (Apologies for the probably stupid questions, I just want to be clear on this!)

    Thanks again!


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