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  • Guide to functional currency rules

    The electronic version of this document is the only authorised version. Printed copies may be out of date.

    Read this guide to find out more about the functional currency rules, including:

    • eligibility requirements
    • the implications for tax accounting and tax reporting.

    You can use this guide if you are:

    • an Australian resident or a non-resident with a permanent establishment in Australia and both of the following apply
      • you keep your accounts solely or predominantly in a particular foreign currency
      • you wish to work out your taxable income (or tax loss) using that foreign currency – that is, using your 'applicable functional currency'.
    • a non-resident disposing of indirect interests in real property in Australia and the sole or predominant currency in which you keep your accounts at the time of disposal is a foreign currency. The application of functional currency rules is mandatory in this situation.

    This guide does not cover:

    • income from overseas permanent establishments of resident taxpayers
    • income attributable to offshore banking units, controlled foreign companies (CFC) or transferor trusts.
      Last modified: 25 May 2021QC 17626