Converting foreign income to Australian dollars

You must convert all foreign income, deductions and foreign tax paid into Australian dollars for tax purposes.

There are 2 ways of doing this. Depending on your circumstances, you can use:

• the exchange rates prevailing at specific times – from 1 July 2003, there are specific Translation (conversion) rules that tell you the exchange rate to use
• an average exchange rate – daily and monthly rates published monthly

Alternatively, use the Foreign income conversion calculator to convert foreign income into Australian dollars, using either a specific or an average rate of exchange for a range of countries.

The government is continually reviewing international tax arrangements. For information on how potential international legislative changes may affect you, see New legislation.

If you need help in applying this information to your own situation, contact us.