The ATO publishes current and historical AUD exchange rates for selected countries on its website.
From 1 January 2020 the Reserve Bank of Australia is the primary data source.
- Financial year and Calendar year average rates
- Monthly rates
- Daily forex rates (from Jan 2020) current & historical
- Daily forex rates (until Dec 2019)
- Rates prior to 1 July 2003
- Conversion rules
See also Odd year endings exchange rates (from 2003)
For South Africa, Hong Kong, New Zealand, and United Kingdom.
Another source of annual exchange rates
The Westpac calendar and financial year average AUD exchange rates is updated annually for each Australian financial year, published shortly after financial year end.
Data is available for countries not covered by the ATO/Reserve Bank list of countries.
Financial year average exchange rates Australian dollar (currently to 2022) (Westpac updated annually and issued shortly after year-end)
- daily rates: Foreign exchange historical rates (Westpac online)
- Foreign income conversion calculator online (ATO)
Foreign Currency Translation Rules
The tax rules require tax returns to be prepared in Australian dollars.
The current rules have been in place since 1 July 2003 and are sourced in Subdivision 960-C – Foreign currency and Taxation Ruling IT 2498.
For most transactions, taxpayers have a choice of translation method:
- prevailing exchange rate on the date of transaction; or
- average exchange rate for the financial year (or lesser period).
A third method applies the rates conforming to accounting standards for an audited financial report for an entity.
The use of average rates for a period must be a “reasonable approximation” of the prevailing transaction spot rates.
‘Reasonable approximation’ currency translation examples
The Tax Office has provided examples of what is considered “reasonable”:
- An Australian resident receiving periodical payments of a pension from Italy can translate the amounts using an average annual exchange rate;
- A taxpayer receiving a pension from the UK which is periodically credited to her bank account in Australian dollars, can choose to use the total in Australian dollars as the translated amount, without the need for any other conversion.
- A business which buys trading stock from Germany and settles the payments in Euros approximately 6 times a month, can use an appropriate average rate of exchange for the cost of trading stock
- An Australian consulting engineer accounting on an accruals basis receiving monthly income from US clients can translate the USD amounts using a yearly or monthly average
- The Australian consulting engineer in the previous example buys an office building in New York for $US 3 million, cannot translate using a yearly average exchange rate because it would not be a “reasonable approximation”.
- A taxpayer has a rental property in the UK. The rent received and expenses are handled in UK bank account. He can use an average rate of exchange for translation.
- The taxpayer in the previous example sells the rental property. An average exchange rate for the transaction would not be appropriate.
Special Translation Rules
s 960-50(6) has some “special translation” rules determining the exchange rate for specific amounts.
They include [simplified summary]:
- a forex event 4 cessation of an obligation is converted at the prevailing exchange rate at tax recognition time [mentioned for reference purposes only; forex events (gains and losses) are not within the scope of this article. See further Foreign exchange gains and losses]
- the cost of a depreciating asset is to be translated at the exchange rate applicable at the earlier of when you begin to hold the asset or satisfying the obligation
- trading stock valued at cost is translated at the date it became on hand
- trading stock at its market selling value or its replacement value is translated at the year-end exchange rate
- capital gains events are translated at the time of the event
- ordinary income is translated at the earlier of the time of receipt or when it is derived
- statutory income is translated at the earlier of the time of receipt or when the requirement first arose to include it in your assessable income.
- deduction amounts (not not being Div 40 deductions) are translated at the earlier of the time of payment or when it became deductible [Div 40 relates to depreciation]
- film production expenditure under Div 376 is translated according to an average rate based on the period of production
- PAYG withholding payments are translated at the date the withholding obligation arose
- an amount of a receipt or a payment, being none of the above: to be translated at the time of receipt or payment.
This page was last modified 2021-07-05