Last updated November 6, 2026
Rules and figures from other sources checked on November 6, 2026. They change, so confirm with the source before you rely on them.
General information, not tax or legal advice. The rules depend on your country and your situation, so check anything with a tax or legal consequence with your accountant.
To invoice in a foreign currency, agree the currency with the client, price the lines and total in it, and state the currency code. If you charge VAT, EU and UK rules also require the VAT amount in your national currency, converted at an accepted rate for the date the VAT becomes chargeable.
Can you legally invoice in a foreign currency?
You can legally invoice in a foreign currency in both the EU and the UK. Article 230 of the VAT Directive says the amounts on an invoice "may be expressed in any currency", provided the VAT payable is expressed in the national currency of the country concerned. HMRC's Notice 700/21 says the same: amounts can be in any currency, and the total VAT must be in sterling.
So the conversion is about the VAT only. An invoice with no VAT on it, such as an EU reverse-charge invoice or an export, has nothing to convert on its face. Your VAT return is still in national currency, so you need the converted value for your records either way.
Which exchange rate do you use for VAT?
The exchange rate for VAT is set by rule, and it applies at the moment VAT becomes chargeable, not when the client pays.
| EU (Article 91) | UK (Notice 700, section 7.6) | |
|---|---|---|
| Default | Latest selling rate on the country's most representative exchange market, under national rules | UK market selling rate at the time of supply |
| Alternative | Latest European Central Bank rate, which countries must accept | HMRC's period rate for customs purposes |
| Other routes | The customs rate, where the country allows it | A commercial rate or method, with HMRC's written agreement |
| Notice needed | A country may ask for one notification before you use the ECB rate | None for the period rate, but you can't then switch without agreement |
Three details get missed:
- The ECB publishes rates against the euro only. In a non-euro country, convert through the euro, as Article 91 says, using the euro rate of each currency.
- ECB rates usually update around 16:00 CET on working days. So the latest published rate on a morning invoice is yesterday's. The ECB says its rates are published for information and strongly discourages using them for transactions. Article 91 still names them for VAT conversion.
- In the EU, the rate doesn't have to appear on the invoice. The Commission's explanatory notes say Article 230 doesn't allow a requirement to show the rate or method. Showing it is still a courtesy to the customer's accountant.
A worked example: from USD invoice to payment
Here's an invented example. A firm in the euro area bills a local client $5,000 plus 20% VAT, in US dollars as agreed, and the rate on the date VAT becomes chargeable is 1 USD = 0.92 EUR.
| USD | EUR at 0.92 | |
|---|---|---|
| Net | $5,000.00 | €4,600.00 |
| VAT at 20% | $1,000.00 | €920.00 |
| Total | $6,000.00 | €5,520.00 |
The invoice shows the USD column, plus the VAT in euros. This line does it:
VAT amount in EUR: €920.00 (USD 1,000.00 at 1 USD = 0.92 EUR, the ECB rate when VAT became chargeable).
The firm enters €920 on its VAT return. Thirty days later the client pays $6,000, and the rate has moved to 0.90, so the bank credits €5,400.
| EUR | |
|---|---|
| Booked when invoiced | €5,520.00 |
| Received | €5,400.00 |
| Exchange loss | €120.00 |
The VAT stays at €920, because Article 91 fixes the rate at the time VAT became chargeable. The €120 is a financial loss for your accounts, and the VAT return doesn't change. Had the rate moved up, it would be a gain. A UK firm works the same way, with sterling in place of euros.
Should you invoice in your currency or the client's?
Invoicing in your own currency puts the exchange risk on the client, and invoicing in theirs puts it on you. Neither is automatically right.
| Choose | When | Watch for |
|---|---|---|
| Your currency | Your costs are in it, and margins are thin | Some clients can't or won't pay in foreign currency, or will mark the price up |
| Their currency | A large client asks, or it wins the work | Rate movement between quote and payment comes out of your margin |
| A third currency | Both sides use it day to day, as with USD in some trades | Two conversions if neither side holds it |
If you bill in the client's currency, keep the payment term short and consider a clause allowing you to re-quote if the rate moves past an agreed point. Long payment terms stretch your exposure to the rate as well as your cash.
How do you word a foreign-currency invoice?
A foreign-currency invoice should state its currency in words or a code, so nobody has to guess. Use USD, not a bare $, which could equally mean Canadian or Australian dollars. Add where the money goes and who pays the charges:
All amounts are in US dollars (USD). Please pay USD 6,000.00 in full to the account below. Bank charges are payable by the sender (OUR).
Check what your bank does with the payment first. Money in USD sent to a euro-only account usually gets converted at the bank's own rate, and that rate can be well off the reference rate. A short payment caused by bank fees leaves the invoice part-paid, and the guide to partial payments covers what to do then. The rest of an international invoice is in the guide to invoicing international clients.
The mistakes to avoid
- Using the payment-date rate for VAT. The VAT rate date is when VAT became chargeable. The payment date only affects your exchange gain or loss.
- Reissuing the invoice because the rate moved. A change in the exchange rate doesn't change the invoice.
- Mixing rate sources. In the UK, adopting HMRC's period rate commits you to it unless HMRC agrees to a change. Pick a source and write it down.
Invoicing in a foreign currency in ERPFlow
In ERPFlow, the currency is set per document, and multi-currency depends on your plan: Free and Starter bill in the base currency only, Growth adds one extra currency, and Business and Enterprise allow any number. You add currencies under Settings > Business Info.
- The rate is stamped on the document. Picking a currency shows a field such as
USD → EUR, pre-filled with the central-bank reference rate for the document's date, and you can overwrite it. If your tax authority wants another rate or date, type that rate in. Later movements never reprice a saved document. - Reports stay in your base currency. The dashboard and customer analytics convert each document at its own stamped rate, and the invoice list shows the base value with the document's amount beneath it.
- One document, one currency. There is no per-line currency, and a customer billed in two currencies gets two invoices.
- Check prices from your catalogue. Products and services are priced in the base currency, and picking one fills in that number without converting it. A €100 service on a USD invoice reads as 100 until you change it.
The PDF and the XML export show the document's own currency only, so the VAT amount in national currency doesn't print by itself. Add it in Notes, as in the example above, or ask your accountant how they want it handled. The tax rate on each line is yours to choose.
Payments are recorded in the invoice's currency. ERPFlow doesn't revalue open invoices, hold multi-currency bank accounts or calculate a realised exchange gain or loss, so that figure comes from your bank statement and goes to your accountant.