Foreign currency receipts: converting to NZ dollars for Inland Revenue
Convert each foreign expense to New Zealand dollars at an acceptable exchange rate, and use the same source consistently. Your tax return is in NZD, so an invoice in US dollars, Australian dollars or euros has to be converted before it counts.
Inland Revenue gives you a few rates to choose from and one rule that matters more than the choice: consistency. In its words, "Use the same source of rates for all your overseas currency amounts. Do this consistently over time."
Which rate to use
| Rate | When it fits |
|---|---|
| The actual rate on the day | Always acceptable. The most precise, and the most work. |
| Mid-month rate | For most purposes Inland Revenue accepts it as the equivalent of the actual rate on any day in that month. |
| Rolling 12-month average | Many repeated transactions through the year, such as a monthly software subscription billed in US dollars. Not for significant, one-off transactions. |
| End-of-month rate | Converting a value or balance at the start or end of the tax year, rather than a purchase. |
Inland Revenue publishes these rates from the Reserve Bank of New Zealand. You can also use rates from the Reserve Bank or other countries' central banks, or your own rates if they suit the type of transaction. What you should not use are cash or foreign cheque rates.
A worked example
You pay US$120.00 for a conference ticket on 10 September 2025.
- Using the actual rate that day, say 0.5900, that is 120.00 ÷ 0.5900 = NZ$203.39.
- Using September's mid-month rate instead gives a slightly different figure, and that is fine as long as you use mid-month rates for your other foreign expenses too.
The rates here are illustrations. Use the published rate for your date.
Foreign tax on overseas receipts
A receipt from overseas may show that country's GST, VAT or sales tax. That is not New Zealand GST, and it cannot be claimed in a New Zealand GST return. For income tax, what you can deduct is what the business expense actually cost you, and unrecoverable foreign tax is part of that cost.
For what a New Zealand receipt has to show to support a GST claim, see GST receipt rules in New Zealand.
Keep the original
Convert for your records, but keep the receipt in the currency it was issued in. The original amount, date and currency are what let you, or Inland Revenue, check the conversion later, and the receipt is a business record you need to keep for seven years.
Sources
Common questions
What exchange rate should I use for a foreign currency expense in New Zealand?
The actual rate on the day, or a rate Inland Revenue accepts in its place. For most purposes it accepts the mid-month rate as equivalent to the actual rate on any day that month. It publishes rates from the Reserve Bank of New Zealand.
Can I use an average exchange rate for the whole year?
Yes, if you have a lot of repeated transactions during the tax year, a rolling 12-month average rate can reduce the work. Inland Revenue says not to use it for significant, one-off transactions.
Can I use the rate my bank charged me?
Inland Revenue lets you use your own exchange rates if they are appropriate for your type of transaction, and asks you not to use cash or foreign cheque rates. Whatever source you choose, use it consistently.
Can I claim the foreign GST or VAT on an overseas receipt?
No. A New Zealand GST return claims New Zealand GST, and tax charged by another country is not that. Overseas tax you cannot recover is part of what the expense cost you.
Every figure on this page is checked against Inland Revenue'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 Inland Revenue?
Seven years after the end of the tax year they relate to. What counts as a business record, when the clock starts, and where the records must be kept.
ReadGST receipts in New Zealand: what a receipt must show to claim GST
Tax invoices were replaced by taxable supply information in 2023. What a receipt needs at $200 and $1,000, and how to work out the GST in a price.
ReadCan you claim business expenses without receipts in New Zealand?
Sometimes, but the burden of proof is on you. What Inland Revenue expects, what can stand in for a lost receipt, and why GST claims need more.
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