Foreign currency receipts: which exchange rate the CRA accepts
Convert at the Bank of Canada rate for the day the expense arose. Your return is filed in Canadian dollars, so a receipt in US dollars, pounds or euros has to be converted, and the CRA's starting point is the Bank of Canada.
The rule
The CRA's folio on income tax reporting currency, S5-F4-C1, says that for any day after 28 February 2017 the relevant rate for converting to or from Canadian dollars is the rate quoted by the Bank of Canada on that day (paragraph 1.4). The Bank publishes a single daily rate for each major currency.
So a US$45.90 hotel bill on a day the Bank's rate was 1.325 is C$60.82 on your books.
When another rate is accepted
The folio also lets you use a rate from somewhere else, provided it is (paragraph 1.6):
- widely available and verifiable
- published by an independent provider on an ongoing basis
- recognized by the market
- used in keeping with well-accepted business principles, including for your financial statements
- used consistently from year to year
Averages are allowed in some cases: the CRA may accept an average over a period to convert certain income items, but not where rates fluctuate significantly (paragraph 1.6.1). For a one-off purchase, the day's rate is the safer choice.
Foreign sales tax isn't GST/HST
US sales tax, UK VAT or Australian GST on a receipt is not Canadian GST/HST, so it can't be claimed as an input tax credit. Where the expense itself is deductible, the foreign tax is part of what it cost you. The rules for Canadian receipts are in GST/HST receipt rules.
For GST/HST itself, amounts in a foreign currency are converted under the CRA's GST/HST Memorandum 3-6, Conversion of Foreign Currency.
What to keep
- the receipt in its original currency, as printed
- the exchange rate you used and where it came from
- your card or bank statement showing the Canadian-dollar amount
Keep them for six years, like any other record.
Sources
Common questions
Which exchange rate should I use for a foreign expense in Canada?
Generally the Bank of Canada rate on the day the expense arose. The CRA's folio on reporting currency says the relevant rate for a day is the one the Bank of Canada quotes for that day.
Can I use my bank's or credit card's exchange rate instead?
The CRA generally accepts a rate from another source if it is widely available, verifiable, published by an independent provider, recognized by the market, and used consistently from year to year. What you actually paid in Canadian dollars on your card statement is also good evidence of the expense.
Can I use an average exchange rate for the year?
The CRA may accept an average over a period for certain income items, but not where rates fluctuate significantly. For a one-off expense, the rate for the day is the safe choice.
Can I claim back foreign sales tax, like US sales tax or UK VAT?
Not as a GST/HST input tax credit. Foreign tax isn't GST/HST. Where the expense itself is deductible, the tax you paid abroad is part of its cost.
Every figure on this page is checked against the CRA's own guidance and linked in the sources above. Last checked . Thresholds change each tax year, so if you are reading this well after that date, confirm the current figures before you rely on them. Terms.
Keep reading
How long do you need to keep receipts for the CRA?
Six years from the end of the last tax year they relate to. When the clock starts, when it runs longer, and why your records have to be kept in Canada.
ReadGST/HST receipts in Canada: what a receipt needs for an input tax credit
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ReadCan you claim business expenses without receipts in Canada?
The CRA can deny what you can't support, and there is no small-expense exemption. What other evidence helps when a receipt is lost, and how to avoid needing it.
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