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  • Conversion of foreign amounts


    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    All foreign income, deductions and foreign tax paid must be expressed in Australian dollars, (unless a functional currency election is in effect). The following table shows how to convert certain amounts.

    How to convert foreign amounts

    Type of foreign income

    Convert foreign income to Australian dollars at*:

    Foreign employment income, pensions and annuities

    the exchange rate that applied at the time you were paid or had the income applied or dealt with on your behalf or as you directed (such as into a bank account), even if no amount was remitted to Australia.

    Foreign business income, dividends, interest and other income

    the exchange rate that applied at the earlier of when you received or derived the income (or, for statutory income, the earlier of when you received the income or were first required to include it in your assessable income)

    Foreign capital gains

    the exchange rate that applied at the time of the transaction or event for each transaction or event involving an amount of foreign currency (or the market value of property expressed in a foreign currency). For example, if an amount included in the cost base of an asset is expressed in foreign currency, convert that amount into Australian currency on the date that the expenditure was incurred. Convert capital proceeds on the date of the CGT event.

    Foreign tax paid

    the exchange rate that applied at the time the foreign tax was paid.

    Foreign deductions (other than capital allowances)

    the exchange rate applicable at the earlier of when the amount was paid or when it became deductible.

    Depreciating assets

    the cost of a depreciating asset is to be converted at the exchange rate that applied at the earlier of when you begin to hold the asset or satisfied your obligations for it (i.e., when you paid for it). This converted cost is then used to calculate the capital allowance deductible.

    Note: At the time of publication, the tax law did not permit the use of average rates. However, there is a regulation making power under which methods of conversion other than those set out above may be specified. For more information on converting foreign amounts to Australian dollars see the Tax Office fact sheet Forex: The general translation rule.

    Last modified: 05 Dec 2006QC 18000