GST/HST on foreign currency invoices in Canada is less complicated than it looks. A Canadian freelancer can invoice in US dollars, euros, or another currency, but must convert the sale and tax into Canadian dollars for GST/HST records and returns. The currency on the invoice does not decide whether tax applies.
The practical job is to answer three questions: is the supply taxable, which rate applies, and which exchange rate will you use? Handle them in that order.
GST/HST on foreign currency invoices in Canada: the basic rule
You may issue an invoice and accept payment in a foreign currency. If the supply is taxable, calculate its Canadian-dollar value for GST/HST purposes. Your return is still reported in Canadian dollars, even when the client pays a USD invoice into a USD bank account.
Currency is separate from place of supply. An Ontario client does not become a foreign client by paying in US dollars, and a US client does not become a Canadian client by paying in Canadian dollars. First determine the tax treatment and rate using the GST/HST place of supply rules.
Which exchange rate should you use?
CRA GST/HST Memorandum 3-6 says the general conversion date is the day the tax becomes payable. That is usually the earlier of when the client pays and when the amount becomes due. An amount commonly becomes due when you issue or date the invoice, when you should have issued it without undue delay, or when a written agreement requires payment.
The CRA also accepts practical alternatives, including:
- The exchange rate on the day the client pays
- The rate on the day you acquire the foreign currency
- The average exchange rate for the month when the tax becomes payable
Pick a permitted method and use it consistently for a reasonable period, such as one year. Do not switch between invoice-date and payment-date rates just to choose whichever produces less tax on each sale.
Where to get the rate
Acceptable sources include the Bank of Canada, a Canadian chartered bank, or the source you normally use to convert the currency. If an actual conversion occurred, you can use the rate from that transaction. Keep documentation showing the source and rate. If your chosen conversion date falls on a weekend or holiday, use the previous business day's rate.
A USD invoice example
Suppose an Ontario consultant bills an Ontario client US$2,000 for a taxable service. The applicable rate is 13% HST, and the consultant consistently uses an exchange rate of C$1.35 per US dollar on the accepted conversion date.
- Canadian-dollar value: US$2,000 × 1.35 = C$2,700
- HST: C$2,700 × 13% = C$351
- Total Canadian-dollar value: C$3,051
The invoice can show the agreed foreign-currency amounts, but the records supporting the GST/HST return should preserve the Canadian-dollar conversion, date, source, and tax calculation. The usual invoice details still apply; review our Canadian freelancer HST invoice guide before sending it.
What if the client is outside Canada?
Many services supplied to a non-resident client are zero-rated, meaning you charge 0% GST/HST. That result comes from the export rules, not from billing in a foreign currency. Exceptions can apply, so confirm the client's residency and the nature of the service. Our guide to GST/HST on US clients covers the common freelancer cases.
Zero-rated sales are still taxable supplies and generally count toward the $30,000 small supplier threshold. Convert foreign-currency revenue to Canadian dollars before adding it to your rolling total.
A simple record-keeping routine
- Record the invoice amount and currency
- Note whether the supply is taxable, zero-rated, or exempt
- Save the conversion date, exchange rate, and rate source
- Record the Canadian-dollar sale and GST/HST separately
- Keep the invoice, contract, payment record, and conversion evidence
Use HST Hero to track the Canadian-dollar value of taxable and zero-rated revenue against the rolling $30,000 threshold. A consistent conversion routine keeps foreign-currency work from creating a registration surprise.
The bottom line
You can invoice in foreign currency, but GST/HST reporting remains in Canadian dollars. Determine the tax treatment first, choose a CRA-accepted conversion method, use it consistently, and keep evidence for every rate. If the contract or payment timing is unusual, ask an accountant which conversion date fits your facts before filing.