Guide · Any country · Getting paid

How to invoice international clients: currency, exchange rates and tax records (US, UK, Canada)

A client in another country wants an invoice. Which currency should it be in, what extra details does it need, and how do you turn the money into your own currency for your tax records? Here's a plain answer, with what the IRS, HMRC and CRA actually say.

General information, not legal or tax advice. Not written or reviewed by a lawyer or accountant. The tables of options and records and the wording are ours; the official items come from the US, UK and Canadian pages linked below, and none of them is a freelance law. Elsewhere was not checked. Official pages were read on 2026-10-16.

The short answer

Agree the currency in your quote or contract before you start, and put the currency code next to every amount on the invoice.
For your tax records, convert each amount into your home currency at a posted exchange rate from a reputable source, and use the same source every time.
US: the IRS wants US dollars, generally at the rate when you receive, pay or accrue the item. UK: HMRC's manual says traders may use London closing rates, a rate quoted by their bank or HMRC's monthly average rates; VAT amounts must be in sterling. Canada: the CRA generally wants the Bank of Canada rate for the day the amount arises.
Sales tax often works differently for clients abroad: many services to business clients abroad fall outside the scope of UK VAT, and many services to non-resident clients are zero-rated for GST/HST, but there are conditions and exceptions.
Working for a US client from outside the US? The client may ask you for a Form W-8BEN instead of a Form W-9.
Keep a simple record for each invoice: amount, currency, rate, source, date, what arrived and the fees.

1. Which currency to invoice in
2. What to add to an invoice for a client abroad
3. Converting to your home currency for tax
4. Exchange differences and fees
5. VAT and GST/HST on clients abroad
6. US clients and Form W-8BEN
7. What to record for each invoice
8. Wording to copy
9. Checklist
Free tools and kits
Where the sources differ
When to get advice
Related
Sources

1. Which currency to invoice in

No tax authority quoted here tells you which currency to bill in; it's a business choice you agree with the client. Our view of the options, as general practice:

Invoice in	Upside	Watch out for
Your own currency	You know what the invoice is worth to you before fees, and that invoice needs no conversion in your books.	The client carries the exchange-rate risk and pays any conversion cost, so some clients will push back or pay more slowly.
The client's currency	Easier for the client to approve and pay, which often means fewer questions and faster payment.	What arrives can differ from what you expected when you quoted, and you convert every amount for your tax records.
A widely used third currency	A middle ground when neither side wants the other's currency, for example US dollars or euros.	Both sides carry exchange-rate risk, and you still convert for your tax records.

Whichever you pick, write it into the quote or contract so it isn't a surprise on the first invoice, and say who pays transfer fees. If you take a deposit, bill it in the same currency.

2. What to add to an invoice for a client abroad

Start with the usual invoice fields and numbering. For a client in another country, also (our suggestions):

The currency code next to every amount and the total (USD, GBP, EUR, CAD and so on), not just a symbol: several countries use "$".
The client's full legal name, address and country, and their tax or VAT number if they gave you one. It helps if you need to show the client is a business abroad (see below).
Payment details that work from abroad. Ask your bank which details overseas payers need, and put them on the invoice.
Who pays fees, so the full amount arrives (see the wording below), and clear payment terms.
Dates with the month as a word, because some countries write the day first and others the month first.
Any tax wording you're required to show if you're registered for VAT or GST/HST. For UK VAT invoices in a foreign currency, see our UK VAT invoice guide; for Canada, our GST/HST invoice guide. We did not check reverse-charge invoice wording.

3. Converting to your home currency for tax

Your tax return is in your home currency, so each foreign-currency amount has to be converted. What each authority says:

Where you're taxed	What the official page says
United States (IRS)	"You must express the amounts you report on your U.S. tax return in U.S. dollars." "If you receive all or part of your income or pay some or all of your expenses in foreign currency, you must translate the foreign currency into U.S. dollars." "Your functional currency generally is the U.S. dollar unless you are required to use the currency of a foreign country." "Use the exchange rate prevailing when you receive, pay, or accrue the item." "If there is more than one exchange rate, use the one that most properly reflects your income." "You can generally get exchange rates from banks and U.S. Embassies." (IRS: Foreign currency and currency exchange rates, page date 22-May-2026). Also: "The Internal Revenue Service has no official exchange rate." "Generally, it accepts any posted exchange rate that is used consistently." (IRS: Yearly average currency exchange rates, page date 17-Sep-2026).
United Kingdom: income tax (HMRC)	From HMRC's Business Income Manual, written for HMRC staff: "Traders may use London closing rates (BIM39505) when translating foreign currency amounts into sterling in their accounts." "Equally they may use other exchange rates, such as an exchange rate quoted by their bank, or the monthly average rates published by HMRC for VAT purposes." "You only need to query the rate of exchange used if, exceptionally, it diverges markedly from rates obtained from reputable sources of this nature." (HMRC: BIM39515, page date 2016-04-01). "The London closing rate is not an ‘official’ rate and businesses may use other exchange rates for tax purposes." (HMRC: BIM39505, page date 2024-09-25). HMRC's monthly rates are on the Trade Tariff exchange rates page, which describes itself as a customs page: "Check which foreign currency exchange rates to use when working out the customs value of your goods" (no page date recorded).
United Kingdom: VAT (HMRC)	Only if you're VAT-registered: "For VAT purposes, amounts of money must always be expressed in sterling." To convert, "you must use the UK market selling rate at the time of the supply", unless you adopt an alternative, for example "as an alternative, you may use the period rate of exchange published by HMRC for customs purposes" (VAT Notice 700 paragraph 7.6). "If you issue VAT invoices in a foreign currency for supplies of goods or services that take place in the UK, you must convert the total amount of VAT payable into sterling" (paragraph 16.4; HMRC: VAT Notice 700, page date 2026-06-25).
Canada (CRA)	"Subsection 261(2) requires that taxpayers determine their Canadian tax results in Canadian currency." "In general, these provisions require that this conversion be made using the relevant spot rate for the day on which the relevant amount arises." "For a particular day after February 28, 2017, the relevant spot rate to be used to convert an amount from one currency to another, where one of the currencies is Canadian currency, is the rate quoted by the Bank of Canada on that day." Other sources: "In this regard, the CRA will generally accept, as the relevant spot rate for a particular day, a rate quoted by a source other than the Bank of Canada if it is:" widely available verifiable published by an independent provider on an ongoing basis recognized by the market used in accordance with well-accepted business principles used for the preparation of the taxpayer's financial statements used consistently from year to year by the taxpayer. "Each of the above conditions must be met in order for such a rate to be accepted." Averages: "For practical reasons, the CRA may also accept the use of an average of exchange rates over a period of time in order to convert certain income items." "If exchange rates fluctuate significantly, the use of the average exchange rate for a period will not generally be accepted." (CRA: Income Tax Folio S5-F4-C1, Income Tax Reporting Currency, page date 2024-06-27). The Bank of Canada publishes its rates on a daily exchange rates lookup; it says: "All Bank of Canada exchange rates are indicative rates only, obtained from averages of aggregated price quotes from financial institutions." (no page date recorded).
Elsewhere	We have not checked other countries' rules. Ask your tax authority or an accountant.

In practice: pick one reputable source (your tax authority's or central bank's rates, or your bank's), note which date your rules use, and stick with it. Country guides: US Schedule C, UK Self Assessment, Canada T2125.

4. Exchange differences and fees

The rate usually moves between the invoice date and the day the money arrives, so what you receive in your own currency can differ from what you recorded when you invoiced. On top of that, banks and payment services take fees and use their own rates.

US: "A taxpayer may also need to recognize foreign currency gain or loss on certain foreign currency transactions." "See section 988 of the Internal Revenue Code and the regulations thereunder." (IRS: Yearly average currency exchange rates). We did not check how section 988 applies to a freelancer's invoices.
UK: "It follows that the exchange rates used in the business accounts are also acceptable for computing exchange gains or losses for the purposes of determining trade profits, where the use of such exchange rates is in accordance with generally accepted accounting practice." (HMRC: BIM39515). We did not read the rest of HMRC's foreign exchange chapter.
Canada and elsewhere: we did not check how exchange gains and losses on invoices are taxed.
Fees: record them separately rather than netting them off silently; they may be business expenses. See how to track freelance expenses.

5. VAT and GST/HST on clients abroad

This matters only if you're registered for UK VAT or Canada GST/HST (see the UK VAT threshold and Canada GST/HST registration guides). Both systems have different rules for services to clients outside the country.

UK VAT (HMRC): "If the supply is in the UK it is subject to UK VAT. If the supply is in an EU member state or another country it is said to be ‘outside the scope’ of UK VAT." "To determine the place of supply of your service you should consider the exact nature of your services against each of the special rules first (read paragraph 6.4) and only if none apply will your service fall under a general rule." For the general rules: "The B2B general rule for supplies of services is that the supply is made where the customer belongs." "The general rule for B2C supplies of services is that the place of supply is where the supplier belongs, irrespective of the location of their customer." "Where the B2B rule applies you should obtain commercial evidence showing that your customer is in business and belongs outside the UK." "For EU customers their VAT registration numbers is the best evidence that your EU customer is in business." (paragraph 6.3). Some services to consumers abroad are covered by section 12, "B2C services of a professional, technical, financial, intellectual or other intangible nature supplied to customers outside the UK": "Where this applies, your services are supplied where your customer belongs and so are outside the scope of UK VAT." (HMRC: VAT Notice 741A, page date 2022-09-29).
Canada GST/HST (CRA): "Section 7 of Part V of Schedule VI is a general zero-rating provision for exported services." "A supply of a service made to a non-resident person is zero-rated under the general provision provided the supply is not specifically excluded under paragraphs 7(a) to (h) of Part V of Schedule VI." Excluded, among others, if the person is an individual who is in Canada at any time when the individual has contact with the supplier in relation to the supply, or the service is rendered to an individual while that individual is in Canada. "Under paragraph 7(b) of Part V of Schedule VI, a supply of an advisory, consulting, or professional service made to a non-resident person is excluded from the general zero-rating provision." But: "Section 23 of Part V of Schedule VI zero-rates a supply of an advisory, consulting, or professional service made to a non-resident person provided the supply is not specifically excluded in paragraphs 23(a) to (d)." (CRA: GST/HST memorandum 4-5-3, Exports – Services and Intangible Personal Property, page date 2023-12-07). The CRA's overview: "Certain services provided to a non-resident person, but not to an individual while the individual is in Canada, that are performed all or partly in Canada may be zero-rated" (CRA: GST/HST on imports and exports, page date 2026-06-22). How to show a client isn't resident is in GST/HST Memorandum 4-5-1, Exports – Determining Residence Status, which we did not read.
US: sales tax on services is set by states; we did not check it.
The client's country may expect VAT, GST or withholding tax to be handled on its side; we did not check other countries.

6. US clients and Form W-8BEN

If you're not a US person and a US client pays you, the client may ask you for a Form W-8BEN rather than the Form W-9 US freelancers give.

"Give Form W-8 BEN to the withholding agent or payer if you are a foreign person and you are the beneficial owner of an amount subject to withholding." "Submit Form W-8 BEN when requested by the withholding agent or payer whether or not you are claiming a reduced rate of, or exemption from, withholding." (IRS: About Form W-8BEN, page date 02-Oct-2026).
Don't use it if: "You are a U.S. citizen (even if you reside outside the United States) or other U.S. person (including a resident alien individual). Instead, use Form W-9 to document your status as a U.S. person." Also: "You are a nonresident alien individual who claims exemption from withholding on compensation for independent or dependent personal services performed in the United States. Instead, provide Form 8233 or Form W-4." "Do not send Form W-8BEN to the IRS. Instead, give it to the person who is requesting it from you." (IRS: Instructions for Form W-8BEN, page date 30-Apr-2026).
Where you do the work matters: "The place, where the personal services are performed, generally determines the source of the personal service income, regardless of where the contract was made, or the place of payment, or the residence of the payer." (IRS: Source of income, personal service income, page date 06-Feb-2026).

We did not check how to fill in each line, tax treaty claims, Form 8233, or what your own country expects you to report. US freelancers: see our guide to the form US clients file about the freelancers they pay.

7. What to record for each invoice

Our suggested columns, as general practice (not an official list). One row per invoice is enough:

Record	Why
Invoice amount and currency code	Exactly what the client owes, as on the invoice.
Invoice date and payment date	Tax rules tie the exchange rate to a date, and which date matters depends on your rules and accounting method.
Exchange rate, its source and the date it is for	Shows you used a posted rate from a reputable source, and the same source each time.
Amount in your home currency	The figure your tax records use.
Amount that actually reached your account	Often less than the invoice after transfer and conversion fees.
Fees, and who charged them	Bank, transfer and platform fees may be business expenses; check your own country's rules.
Client country and business status	Sales-tax treatment can depend on where the client belongs and whether it is buying as a business.

Keep these with the invoice and bank statement, for as long as your tax authority asks: see how long to keep records.

8. Wording to copy

Replace everything in [brackets]. This is ours, not from any agency, and it's not legal or tax advice.

Payment note for the invoice

All amounts on this invoice are in [currency code].

Please pay [total and currency code] by [due date, with the month written as a word] to:
[account name]
[bank name and address]
[the account details your bank gives for payments from abroad]

Please quote [invoice number] as the payment reference. Fees charged by your bank are paid by you and fees charged by my bank are paid by me, so the full amount arrives.

Email to a new client abroad

Subject: Invoicing details for [project name]

Hi [name],

Before I send the first invoice, could you confirm a few details?

- Your business's full legal name and billing address, including the country
- [your VAT or other tax registration number, if you have one / whether you are buying as a business or for personal use]
- Who should receive invoices, and any purchase order or reference I should quote

I'll invoice in [currency code], with the payment details on each invoice. Fees charged by your bank are paid by you and fees charged by my bank are paid by me.

If you need a tax form from me, tell me which one and I'll send it.

[Your name]

More on the first steps with a new client: client onboarding checklist.

9. Checklist

Currency agreed in the quote or contract, with who pays transfer fees.
Currency code next to every amount; dates with the month as a word.
Client's legal name, country and any tax or VAT number on file.
Payment details for payers abroad on the invoice.
One exchange-rate source chosen and used consistently; rate and date recorded for each invoice.
Amount received and fees recorded separately.
If registered for VAT or GST/HST: checked whether the service is charged, zero-rated or outside the scope, and kept the evidence.
Working for a US client from outside the US: asked which form the client needs.

Free tools and kits

Free invoice generator (any currency label; nothing is converted) and free receipt generator.
Our paid Freelance Billing Kit by Small Rows (US$12, one-time) prints your currency label on every invoice and tracks what's paid and owed. It's one currency per file and doesn't convert amounts or store exchange rates, so keep a file per currency and record the rate you used separately.
Our paid Quote & Proposal Kit by Small Rows (US$12, one-time) prints a quote or proposal in the currency you choose, so the client agrees the currency before you start. It doesn't convert amounts either.
All three kits together: the All-Kits Bundle by Small Rows (US$24, one-time).

Where the sources differ

Which rate: the IRS has no official rate and accepts a posted rate used consistently; HMRC's manual accepts London closing rates, a bank's rate or HMRC's monthly averages, and says a rate only needs querying if it diverges markedly from reputable sources; the CRA starts from the Bank of Canada rate and accepts other sources only if every listed condition is met.
Averages: the CRA may accept an average over a period for some income, but not when rates move a lot; HMRC's manual names its own monthly average rates as acceptable; the IRS pages quoted here describe the rate when you receive, pay or accrue the item.
Sales tax: UK VAT asks where the customer belongs and whether it's a business; Canada's GST/HST zero-rating asks whether the client is non-resident and which kind of service it is.
What we did not check: US state sales tax; how IRS section 988 applies to freelancers; tax treaties and Form W-8BEN line by line; the rest of HMRC's foreign exchange chapter and UK reverse-charge invoice wording; HMRC's VAT special rules for particular services; how Canada taxes exchange gains and losses, and GST/HST Memorandum 4-5-1, Exports – Determining Residence Status; Quebec QST; withholding tax or VAT in the client's country; other countries.

When to get advice

most of your income is in a foreign currency, or you hold money in a foreign-currency account;
you're registered for VAT or GST/HST and aren't sure whether to charge it to a client abroad;
a client asks for a tax form you don't recognise, or wants to withhold tax from your payment;
you work from another country for part of the year;
exchange-rate swings have made a large difference to what you received.

Ask an accountant or tax adviser where you're taxed. This page is general information only.

Sources

United States: IRS: Foreign currency and currency exchange rates (page date 22-May-2026) · IRS: Yearly average currency exchange rates (page date 17-Sep-2026) · IRS: About Form W-8BEN (page date 02-Oct-2026) · IRS: Instructions for Form W-8BEN (page date 30-Apr-2026) · IRS: Source of income, personal service income (page date 06-Feb-2026)
United Kingdom: HMRC: BIM39515, exchange rate for tax purposes (page date 2016-04-01) · HMRC: BIM39505, rates of exchange (page date 2024-09-25) · HMRC: monthly exchange rates (Trade Tariff) (no page date recorded) · HMRC: VAT Notice 700 (page date 2026-06-25) · HMRC: VAT Notice 741A, place of supply of services (page date 2022-09-29)
Canada: CRA: Income Tax Folio S5-F4-C1, Income Tax Reporting Currency (page date 2024-06-27) · Bank of Canada: daily exchange rates (no page date recorded) · CRA: GST/HST memorandum 4-5-3 (page date 2023-12-07) · CRA: GST/HST on imports and exports (page date 2026-06-22)

Checked 2026-10-16. Found a mistake? Tell us via Support.