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Foreign Currency Transactions

Accounting for GST when you sell, import or buy in foreign currency and reporting requirements for exchange gains and losses.

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Sales in Foreign Currency

For such sales with GST, you must convert the following items in the tax invoice into Singapore dollars using an approved exchange rates for GST purpose (190KB):

  1. Total amount payable excluding GST;
  2. Total GST payable; and
  3. Total amount payable including GST.

These amounts in Singapore dollars may be shown separately beside their respective amounts in foreign currency on your tax invoice.

In your GST return, you should report the amounts in Singapore dollars shown in your tax invoice for "value of standard-rated supplies" and "output tax due".

Examples of the approved exchange rates are exchange rates published by local banks or locally circulated newspapers. This exchange rate must be updated at least once every three months and used consistently for internal business reporting, accounting and GST purposes.

The exchange rate source selected must also be used consistently for at least one year from the end of the accounting period in which the source was first used.

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Purchases and Imports in Foreign Currency

Your supplier has to indicate the GST payable on the tax invoice in Singapore dollars based on the exchange rate from the approved source he selected.

You should claim input tax on such purchases based on the Singapore dollar amounts shown in the supplier's tax invoices.

This requirement applies even if you have recorded the purchases at a different exchange rate in your books.

For imports, you should claim input tax based on the Singapore dollar amounts shown in the import permits issued by Singapore Customs.

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Reporting Exchange Gains/Losses

You may sell goods to your customers and invoice them in a foreign currency (e.g. US dollars).

When your customers make payment in foreign currency and you exchange the foreign currency for Singapore dollars, an exchange gain or loss may arise and it is a supply for GST purpose.

You should report the absolute value (i.e. drop negative sign, if any) of net realised exchange gain/loss for each prescribed accounting period in Box 3 of your GST return.

Example 1: Reporting Exchange Gains/Losses

Your prescribed accounting period is from Oct to Dec 2014.

 Realised exchange gain/ (loss)

Oct 2014

($150)

Nov 2014

$100

Dec 2014

($200)

Net realised foreign exchange loss for the period = ($250)

Absolute value of net realised foreign exchange loss for the period = $250

In addition, you received $400 interest from fixed deposit in December 2014.

Total value of exempt supplies (Box 3) = $250 + $400 = $650

Unrealised Exchange Gains/Losses

Unrealised exchange gains/ losses (e.g. from sales which payment is still outstanding) and translation gains differences (i.e. year-end conversion from foreign currency to local currency for statutory reporting purposes) should be excluded from GST reporting as they do not give rise to any supply.

If it is administratively difficult for you to separately track realised and unrealised exchange gains/losses, you may report the total value of realised and unrealised gains/losses if you fulfil the following conditions:

  1. Your accounting practices conform to proper accounting and reporting standards; and
  2. You adopt the same basis of reporting value of exempt supplies from foreign currency and derivative transactions consistently.

Reporting unrealised gains/losses may affect your input tax claims when applying the De Minimis Rule. You are advised to consider the reduction in tracking efforts against the impact on input tax claims.

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