Invoicing in a Foreign Currency: Which Exchange Rate Does the CRA Accept?

You can bill in any currency you like, but the GST/HST has to be reported in Canadian dollars. Section 159 of the Excise Tax Act and GST/HST Memorandum 3-6 give you four acceptable conversion dates and five acceptable rate sources - and one hard requirement to pick a method and stick to it.

The 60-second version

You may invoice in any currency. You must report the tax in Canadian dollars. Section 159 of the Excise Tax Act says that where consideration is expressed in a foreign currency, its value is computed on the basis of that currency's value in Canadian currency on the day the tax is payable, or on such other day as is acceptable to the Minister [1].
The default conversion date is the day GST/HST becomes payable - the earlier of the day consideration is paid and the day it becomes due, which for most invoices is the invoice date [3][4].
Three alternative dates are pre-approved by GST/HST Memorandum 3-6: the day consideration is paid, the day the foreign currency was acquired, and the average rate for the month in which tax becomes payable [2].
Whichever you pick, you must use it consistently for a reasonable period, such as one year [2]. Picking the best-looking rate per invoice is not a method.
Acceptable rate sources are a closed list: the source used for the actual conversion, the source you typically use for actual conversions, a Canadian chartered bank, the Bank of Canada, or the CBSA value-for-duty rate [2][12][13]. A quote-tracking data feed you do not actually trade through is not acceptable [2].
If the conversion date lands on a weekend or holiday, use the previous business day's rate [2].
Supplier and customer do not have to use the same method [2] - so the GST on your invoice and the input tax credit your customer claims can legitimately differ by cents.

The rule is one sentence long

Almost everything in this article unpacks a single provision. Section 159 of the Excise Tax Act reads, in full:

Where the consideration for a supply is expressed in a foreign currency, the value of the consideration shall, for the purposes of this Part, be computed on the basis of the value of that foreign currency in Canadian currency on the day the tax is payable, or on such other day as is acceptable to the Minister [1].

Two halves. The default rule - the day the tax is payable. And a discretion - some other day the Minister accepts. The CRA has published what it accepts, so the discretion is not a mystery; it is a menu, and the menu is GST/HST Memorandum 3-6, Conversion of Foreign Currency [2], which replaced the older GST Memorandum 300-7-10 and Policy Statement P-222.

Note what section 159 does not say. It does not prohibit invoicing in USD, EUR or anything else. It does not require you to hold a Canadian dollar bank account. It governs one thing: the number you use when computing the value of the consideration, which is the base for the tax rate under section 165 [5].

Step one: find the day the tax is payable

The default conversion date is the day the tax is payable, so you need that date before you need an exchange rate. Subsection 168(1) makes tax payable on the earlier of the day the consideration is paid and the day it becomes due [3].

Subsection 152(1) then deems consideration to become due on the earliest of the day the supplier first issues an invoice, the date of that invoice, the day the supplier would have invoiced but for an undue delay, and the day the customer must pay under a written agreement [4].

For a business that invoices before it collects, that is the invoice date. The full timing analysis - including deposits, progress billing and construction holdbacks - is in when does GST/HST become payable. If you are still working out whether you have to charge tax at all, start with the $30,000 registration threshold.

Step two: pick one of four dates, then stop picking

Memorandum 3-6 sets out the day the tax becomes payable plus three alternatives the Minister accepts [2]:

The day the tax becomes payable - the statutory default under section 159 [1].
The day the consideration is paid.
The day the foreign currency was acquired.
The average rate of exchange for the month in which the tax becomes payable.

Then comes the condition that matters more than the choice itself:

Where a registrant uses a particular day for the conversion of foreign currency ... the registrant is to use the particular day consistently and for a reasonable period of time, such as one year [2].

A registrant with separate business lines may use different days for different lines where circumstances merit it, with the Minister's approval [2]. Anything outside the listed methods needs prior approval from the Excise and GST/HST Rulings Directorate [2] - it is not something you adopt first and defend later.

And the small mechanical rule that catches month-end billing: if your chosen method puts the conversion date on a weekend or a holiday, use the rate for the previous business day [2].

Which date should you actually choose?

All four are equally legal, so the question is operational.

Day tax becomes payable (invoice date) is the easiest to defend and the easiest to automate, because it is the same date the rest of your GST/HST reporting keys off. Its drawback is that the CAD you eventually receive will differ from the CAD you reported, which becomes a foreign exchange gain or loss for income tax purposes rather than a GST adjustment.
Day of payment matches the tax to the cash more closely, but it means you cannot compute the tax at the moment you issue the invoice - which makes the tax line on the invoice itself provisional. That is awkward given the disclosure requirements discussed below.
Day the currency was acquired suits a business that converts in lumps rather than per transaction.
Monthly average is the least work at volume and the least defensible per-invoice, but it is explicitly sanctioned [2] and the Bank of Canada publishes the underlying figures [12].

Step three: use an acceptable rate source

Choosing a date is only half the method. Memorandum 3-6 lists the sources the CRA accepts [2]:

the source used for an actual conversion - that is, where the foreign currency was actually exchanged;
the source the person typically uses for actual conversions;
a Canadian chartered bank;
the Bank of Canada [12];
the rate provided by the Canada Border Services Agency for converting the value for duty of imported goods, per CBSA Memorandum D13-2-3 [13].

The memorandum also gives an explicit negative example, and it is the one most likely to trip up a modern software stack. A company subscribed to a database service that tracks and reports exchange rates - interbank rates, Bank of Canada rates, average chartered bank rates - but that does not itself buy or sell currency. The CRA's conclusion: that database service is not an acceptable source, because its rates do not reflect the rate the company actually used and it is not one of the listed sources [2].

The practical reading: a rate API is fine if it is publishing the Bank of Canada's own rate and you are citing the Bank of Canada as your source. It is not fine as a source in its own right. And whichever you use, "the use of a particular exchange rate source must be supported with appropriate documentation" [2].

One more rule that gets overlooked. If you pay a premium to obtain foreign currency for a particular transaction - a forward contract with a financial institution, say - any additional cost of obtaining that currency must be included when converting [2]. You cannot report the guaranteed headline rate and treat the premium as a separate financing cost for GST/HST purposes.

Worked examples from the memorandum

These are the CRA's own numbers, which makes them worth reproducing exactly [2].

Day of payment. A registrant makes a taxable supply in Ontario (HST 13%) and invoices $1,000 US on 11 September 2017. Payment in US dollars arrives 19 October 2017. The rate on the invoice date was 1.2478; on the payment date, 1.2128. Using the payment-date method, consideration is $1,212.80 CAD and HST is $157.66. That $157.66 is what goes into net tax.

Day currency acquired. A US-based non-resident registrant invoices a Canadian registrant $1,000 US on 12 April 2017 for a supply made in Alberta (GST 5%). The recipient buys a money order for $1,000 US on 16 June 2017 at 1.3232, and computes GST of $66.16 CAD.

Monthly average. Two supplies made in Nova Scotia (HST 15%) in June 2017, $50 and $100, invoiced together in US dollars on 20 July 2017. Using the Bank of Canada July average of 1.2605, consideration is $189.08 CAD and HST is $28.36.

Every one of those examples ends with the same sentence in the memorandum: the method must be used consistently for a reasonable period of time, such as one year [2].

What goes on the invoice itself

Section 159 tells you how to compute the value. Section 223 tells you what you have to disclose. Where a registrant makes a taxable supply, the registrant must indicate to the recipient either the consideration paid and the tax payable as separate amounts, the total tax payable, or that the amount charged includes the tax [8].

Section 223 does not, on its face, dictate a currency. But the tax payable is a Canadian dollar amount by operation of section 159 [1], and the customer's input tax credit claim depends on the documentation you give them - which is governed by the Input Tax Credit Information (GST/HST) Regulations [9] and requires the amount of tax paid or payable to be ascertainable from the supporting documents.

So the defensible invoice layout for a foreign-currency sale to a Canadian customer is:

Line items and subtotal in the billing currency.
The exchange rate used, and the date it applies to.
The GST/HST line shown in Canadian dollars, with the rate applied.
Your GST/HST registration number, which the ITC regulations require above the $30 threshold [9].
A total in the billing currency, with the CAD tax amount clearly identified.

The rest of the mandatory content is unchanged by currency - see what a compliant GST/HST invoice must show, and Quebec QST invoice requirements if you bill into Quebec.

Do you even charge Canadian tax on a foreign-currency invoice?

Currency and taxability are independent questions, and conflating them is the most expensive mistake in this area. Invoicing in USD does not make a supply an export, and invoicing in CAD does not make an offshore supply taxable.

Taxability turns on the place of supply. Section 142 deems a supply to be made in Canada or outside Canada based on where tangible property is delivered or made available, where intangible property may be used, where real property sits, and where a service is performed [6]. Section 143 then deems a supply of personal property or a service made in Canada by a non-resident to be made outside Canada, unless it is made in the course of a business carried on in Canada, the person is registered, the supply is a qualifying tangible personal property supply with a section 211.22 registration requirement, or it is an admission the non-resident did not acquire from someone else [7].

Once a supply is made in Canada, which rate applies is a province-level question covered in the GST/HST place of supply rules. Non-residents doing business in Canada should read CRA guide RC4027 [15] alongside this.

The other side: claiming ITCs on foreign-currency purchases

The same conversion machinery runs in reverse when you are the buyer. Section 169 sets the input tax credit entitlement by reference to tax that became payable or was paid [10], and section 159 fixes what that amount is in Canadian dollars [1].

Two consequences worth planning around:

Your supplier's number and your number can differ, legitimately. The memorandum states plainly that the supplier and the recipient are not required to use the same method of conversion [2]. Small differences between the tax on a supplier invoice and the ITC you claim are expected, not an error to chase.
Your own conversion method has to be consistent too. The consistency requirement is written as applying to the person doing the converting [2], and the CRA's own examples apply it to recipients as well as suppliers.

Foreign currency for income tax is a different regime

Do not carry your GST/HST conversion policy across to your income tax return without checking. They are separate statutes with separate rules.

The default for income tax is that Canadian tax results are determined in Canadian dollars. Section 261 of the Income Tax Act sets out the functional currency rules, under which certain corporations may elect to report in a qualifying "elected functional currency" instead [14] - an election with its own conditions, transition rules and definitions of Canadian currency year and functional currency year. It is a corporate election, not a default, and it does not change your GST/HST obligation to compute the tax in Canadian dollars under section 159 [1].

The practical consequence for most small businesses: the CAD you booked as revenue on the invoice date and the CAD you actually received on the payment date will differ. That difference is a foreign exchange gain or loss on the income tax side. It is not a reason to go back and re-report the GST/HST, because section 159 fixed the tax figure at the conversion date you chose [1].

Documentation is where this gets audited

A conversion method with no evidence behind it is not a method. Memorandum 3-6 is explicit: sufficient documentary evidence must be kept of the exchange rate in effect on the date of conversion, and suppliers must keep books and records adequate to determine the GST/HST to be paid, collected, deducted or refunded [2].

The statutory backstop is section 286 of the Excise Tax Act. Every person carrying on a business or engaged in commercial activity in Canada must keep records sufficient to determine their liabilities and obligations; records must be kept in Canada in English or French unless the Minister authorises otherwise; and they must be retained until six years after the end of the year to which they relate [11].

For foreign-currency invoicing, "sufficient" means you can reconstruct, per invoice: the billing currency amount, the conversion date under your chosen method, the rate, the named source of that rate, and the resulting CAD tax. If your accounting system stores only the converted total, you cannot do that. Retention specifics are in how long to keep invoices in Canada.

The setup checklist

Write your conversion policy down - which of the four dates, and which rate source. One page. Date it.
Apply it for at least a year before changing it, and document why if you do change [2].
Name a listed source [2]. The Bank of Canada's daily exchange rates page [12] is the simplest defensible answer for a business that does not convert through a single bank.
Store the rate on the invoice record, not just the converted amount - and store the date it applies to.
Show tax in CAD on the invoice even when the subtotal is in another currency [1][8].
Handle weekends explicitly in whatever automates this: previous business day [2].
Add any conversion premium to the converted value rather than expensing it separately [2].
Decide taxability first, currency second. Sections 142 and 143 decide whether Canadian tax applies at all [6][7].
Do not reconcile GST to the cash received. The tax was fixed at your conversion date; the difference is an income tax FX item.
If you want a method outside the menu, get it approved first [2].

If you invoice internationally at any volume, the cash-collection side deserves the same attention as the tax side - see charging interest on overdue invoices in Canada.

Frequently asked questions

Can I invoice a Canadian customer in US dollars?

Yes. Nothing in the Excise Tax Act requires invoices to be denominated in Canadian dollars. Section 159 assumes the opposite: it tells you what to do where the consideration for a supply is expressed in a foreign currency. What you cannot do is report the GST/HST in that foreign currency. The value of the consideration must be computed in Canadian currency, and the tax that flows from it under section 165 is therefore a Canadian dollar amount.

Which exchange rate date does the CRA accept?

Four. The statutory default in section 159 is the day the tax becomes payable. GST/HST Memorandum 3-6 adds three days the Minister accepts: the day the consideration is paid, the day the foreign currency was acquired, and the average rate for the month in which the tax becomes payable. You must use whichever you choose consistently for a reasonable period, such as one year. Any other method requires prior approval from the Excise and GST/HST Rulings Directorate.

Can I use an online exchange rate API as my source?

Only if it is reporting a rate from an acceptable source and you cite that source. GST/HST Memorandum 3-6 lists five acceptable sources: the source used for the actual conversion, the source you typically use for actual conversions, a Canadian chartered bank, the Bank of Canada, and the CBSA value-for-duty rate. The memorandum gives an explicit example of a database service that tracks and reports rates but does not buy or sell currency, and rules it out - its rates neither reflect an actual conversion nor come from a listed source.

What if my conversion date falls on a weekend?

Use the previous business day's rate. GST/HST Memorandum 3-6 states that if the chosen conversion method results in a date falling on a weekend or a holiday, the rate of exchange for the previous business day should be used. This matters most for month-end and quarter-end invoicing, where the tax point routinely lands on a Saturday or Sunday.

Do I have to use the same conversion method as my supplier?

No. GST/HST Memorandum 3-6 states directly that the supplier and the recipient of a supply are not required to use the same method of conversion to determine the value of the consideration in Canadian currency. A small discrepancy between the GST/HST shown on a supplier's foreign-currency invoice and the input tax credit you compute is therefore expected. Each party has to be internally consistent, not consistent with the other.

Does the GST/HST change if the exchange rate moves before I get paid?

No. Section 159 fixes the value of the consideration as at the conversion date produced by your chosen method. If you convert at the day the tax becomes payable and the rate moves before the customer pays, the tax you reported does not change. The difference between the Canadian dollars you booked and the Canadian dollars you received is a foreign exchange gain or loss for income tax purposes, handled on your income tax return rather than by amending a GST/HST return.

Does invoicing in a foreign currency mean the supply is an export?

No, and this is the costliest confusion in the area. Currency and taxability are unrelated. Whether Canadian tax applies is decided by the place of supply rules in section 142, which look at where tangible property is delivered, where intangible property may be used, where real property is situated and where a service is performed. Section 143 then deems supplies of personal property or services made in Canada by a non-resident to be made outside Canada unless specific conditions are met. A supply made in Canada is taxable whether you bill it in Canadian dollars, US dollars or euros.

What records do I need to keep for foreign-currency invoices?

Enough to reconstruct the conversion. GST/HST Memorandum 3-6 requires sufficient documentary evidence of the exchange rate in effect on the date of conversion, and documentation supporting the use of the particular rate source. Section 286 of the Excise Tax Act then requires records adequate to determine your liabilities and obligations, kept in Canada in English or French unless the Minister authorises otherwise, and retained until six years after the end of the year to which they relate. In practice: store the billing-currency amount, the conversion date, the rate, the named source, and the resulting Canadian dollar tax on each invoice record.

Sources cited in this article

Excise Tax Act, s. 159 - Value in Canadian currency (Justice Laws)
https://laws-lois.justice.gc.ca/eng/acts/E-15/section-159.html
CRA - GST/HST Memorandum 3-6, Conversion of Foreign Currency
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/3-6/conversion-foreign-currency.html
Excise Tax Act, s. 168 - When tax payable (Justice Laws)
https://laws-lois.justice.gc.ca/eng/acts/E-15/section-168.html
Excise Tax Act, s. 152 - When consideration due (Justice Laws)
https://laws-lois.justice.gc.ca/eng/acts/E-15/section-152.html
Excise Tax Act, s. 165 - Imposition of goods and services tax (Justice Laws)
https://laws-lois.justice.gc.ca/eng/acts/E-15/section-165.html
Excise Tax Act, s. 142 - Place of supply, general rules (Justice Laws)
https://laws-lois.justice.gc.ca/eng/acts/E-15/section-142.html
Excise Tax Act, s. 143 - Supply by non-resident (Justice Laws)
https://laws-lois.justice.gc.ca/eng/acts/E-15/section-143.html
Excise Tax Act, s. 223 - Disclosure of tax on the invoice (Justice Laws)
https://laws-lois.justice.gc.ca/eng/acts/E-15/section-223.html
Input Tax Credit Information (GST/HST) Regulations, SOR/91-45 (Justice Laws)
https://laws-lois.justice.gc.ca/eng/regulations/SOR-91-45/page-1.html
Excise Tax Act, s. 169 - Input tax credits (Justice Laws)
https://laws-lois.justice.gc.ca/eng/acts/E-15/section-169.html
Excise Tax Act, s. 286 - Keeping books and records (Justice Laws)
https://laws-lois.justice.gc.ca/eng/acts/E-15/section-286.html
Bank of Canada - Daily exchange rates
https://www.bankofcanada.ca/rates/exchange/daily-exchange-rates/
CBSA Memorandum D13-2-3 - Exchange Rate for Calculation of Value for Duty
https://www.cbsa-asfc.gc.ca/publications/dm-md/d13/d13-2-3-eng.html
Income Tax Act, s. 261 - Functional currency reporting (Justice Laws)
https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-261.html
CRA - RC4027 Doing Business in Canada: GST/HST Information for Non-Residents
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4027/doing-business-canada-gst-hst-information-non-residents.html

All sources verified August 27, 2026. Spotted a link that has moved? Email [email protected] and we will correct it.