FoderisUSD revenue through Stripe in Australia: GST and your books
Plenty of Australian online and SaaS businesses price in US dollars. But your books and your BAS are in Australian dollars, and GST has its own rules for converting foreign currency. This guide covers what Stripe does with a USD payment, which amount to record, how GST applies, and the evidence to keep.
In short
- If your Stripe account settles in AUD, Stripe converts each foreign currency payment to AUD and shows the AUD amount and exchange rate on the transaction.
- In your books, record the sale at the AUD amount Stripe converted it to, with Stripe’s fees as a separate expense. Keep the original USD amount for reference.
- The currency you charge in doesn’t decide GST. Where the customer is does.
- Sales to Australian customers are generally taxable even if priced in USD. GST is worked out in AUD.
- Services supplied to overseas customers are often GST-free, but you need evidence of where the customer is.
- The ATO’s rules on exchange rates for GST are specific. Pick one approach, use it consistently, and confirm it with your accountant.
What Stripe does with a USD payment
Stripe separates the presentment currency (what the customer is charged in, say USD) from the settlement currency (what your bank account uses, AUD for most Australian accounts). Stripe’s currencies documentation says that when these differ, Stripe converts the charge into your settlement currency.
On the exchange rate, Stripe says it generally applies the mid-market rate, and that conversion is subject to fees. Stripe’s Australian pricing page lists an extra 2% when currency conversion is required. Because Stripe applies GST to all its fees for Australian accounts, that conversion fee includes GST like any other fee.
Each converted payment creates a balance transaction in AUD. Stripe’s balance transaction reference explains that the original amount multiplied by the exchange_rate field equals the converted amount. Stripe’s itemised reports also include the customer-facing amount and currency, so you can see both the USD price and the AUD result.
Which amount goes in your books
For most small businesses, the practical answer is: record the AUD amount Stripe converted the payment to, before fees. That is the amount your Stripe balance actually received. Record Stripe’s fees separately, as you would for AUD payments, and keep the original currency amount and exchange rate alongside.
This keeps your Stripe holding account, payouts and bank deposits in agreement, because they all use the same AUD amounts. (See how to record Stripe payouts.)
For income tax, Australia has separate foreign currency translation rules in the income tax law. For a business that converts every payment to AUD straight away, the AUD amount received is usually a sensible basis, but check with your accountant if you hold foreign currency balances or have large volumes.
GST on foreign currency sales to Australians
A sale to an Australian customer is not GST-free just because you priced it in USD. If the sale would be taxable in AUD, it’s taxable in USD too, and you report it on your BAS in AUD.
The ATO’s ruling on foreign currency for GST is GSTR 2001/2. In summary:
- You convert the foreign currency price to AUD using an exchange rate you choose. The ruling allows a rate from a foreign exchange organisation (for example, a commercial bank), the Reserve Bank of Australia rate, or an agreed rate.
- You should use your chosen rate consistently. Switching between rates to reduce GST is treated as not following the rules.
- The conversion day depends on your GST accounting method. On a non-cash (accrual) basis, it’s the earlier of the day you receive payment or the transaction or invoice date (whichever you’ve chosen). On a cash basis, you can choose the transaction date, invoice date or payment date.
With Stripe card payments, payment and transaction usually fall on the same day.
Can you use Stripe’s exchange rate?
Many businesses use the AUD amount Stripe settles at, because it’s the real amount received. Whether Stripe’s rate fits the ruling’s list of acceptable rates is a question to confirm with your accountant. If they prefer the RBA rate, you’d convert the USD price using that rate for GST and the small difference from what Stripe paid is an exchange gain or loss, not GST.
Refunds on foreign currency sales
Stripe says refunds and disputes on converted payments are converted at the current exchange rate, so the AUD taken from your balance can be more or less than the original AUD amount. For GST, though, GSTR 2001/2 says the adjustment should generally use the exchange rate from the original conversion day. So the GST reduction on a refund matches the GST you originally reported, and any difference in AUD is an exchange gain or loss.
Sales to overseas customers
The ATO’s exports and GST page says a supply of a service is GST-free if it is used or enjoyed outside Australia, or is made to a non-resident who is not in Australia when the supply is made. For many SaaS and digital businesses, that covers subscriptions sold to customers abroad. There are exceptions, for example where the service is actually provided to someone in Australia, so check the ATO page or your accountant if your case is unusual.
GST-free export sales still go in G1 on your BAS. They add nothing to 1A.
Keep evidence of where the customer is
The ATO’s example on that page is blunt: a business that works out its GST-free sales from subscriber locations must know those locations, and if it can’t obtain the location of each subscriber, all its sales will be taxable.
Useful evidence, much of which Stripe already records:
- the customer’s billing country
- the card’s issuing country (Stripe reports include a card country column)
- the customer’s IP address country, if you capture it
- for business customers, their business name and country.
When evidence conflicts, for example a US billing address with an Australian card, look at it more closely before treating the sale as GST-free.
Worked example
Two customers each subscribe to a plan priced in US dollars. For the example, Stripe converts at 1 USD = 1.5200 AUD.
| Customer | Charged | AUD received (before fees) | GST treatment | GST |
|---|---|---|---|---|
| Company in the US | US$100.00 | 152.00 | GST-free export | 0.00 |
| Business in Melbourne | US$110.00 | 167.20 | Taxable | 15.20 |
The Melbourne sale is taxable, so GST is one eleventh of the AUD amount: 167.20 ÷ 11 = 15.20.
On the BAS, with G1 reported including GST, these two sales add 319.20 to G1 (319 in whole dollars) and 15.20 to 1A (15). Stripe’s fees on both payments, including the currency conversion fee, are recorded separately as an expense with their GST credit. See Stripe fees and GST in Australia for that side.
Questions
Do I need a USD bank account?
No. If your Stripe account settles in AUD, Stripe converts payments for you. Stripe does offer settlement in additional currencies in some countries, but holding foreign currency brings exchange gains and losses into your books. Talk to your accountant first.
Should I charge GST to overseas customers who pay in AUD?
Currency doesn’t decide it. A service supplied to a non-resident who isn’t in Australia is often GST-free whatever the currency. A service supplied to someone in Australia is generally taxable whatever the currency.
Which exchange rate do I use if I don’t use Stripe’s?
The ATO’s ruling allows the RBA rate on the conversion day or the day before, a rate from a foreign exchange organisation, or an agreed rate. Choose one and use it consistently. Check the current ATO guidance before switching.
Can I claim GST on Stripe’s currency conversion fee?
Stripe applies GST to all its fees for Australian accounts, and the conversion fee is a Stripe fee. If you’re registered for GST, you can generally claim the credit using Stripe’s monthly tax invoice.
How Foderis helps
Foderis has Stripe built in, so foreign currency payments are recorded at the AUD amount Stripe settled, with Stripe’s fees kept separate, and they feed straight into your Simpler BAS figures ready to copy. Foderis is hosted in Sydney and costs A$9 a month, with a 30-day free trial.
This is general information, not tax advice. Your situation may differ: check with your accountant or the ATO.