Invoicing in dollars or pounds: rates, VAT and exchange differences
Written by Ilias Aarrass5 min read · Last reviewed on 
Written by Ilias Aarrass5 min read · Last reviewed on An American startup wanting to settle in dollars, a British publisher paying in pounds: for developers, designers and copywriters it is more rule than exception. Invoicing in foreign currency is entirely allowed, but your records run in euros and that is where it pinches. Two fixed habits, a consistent conversion rate and a separate account for exchange differences, keep it simple.
The invoice: currency free, VAT in euros
You may express the invoice amount in any currency. One requirement stands: if Dutch VAT is due, the VAT amount must also appear in euros on the invoice. With most foreign business clients that does not even arise, because the VAT is reverse-charged or the service falls outside Dutch scope; the usual mention then suffices, see VAT and foreign clients. All normal invoice requirements apply otherwise, and for your return and records you use the euro equivalent.
Which rate to use
For conversion you use the rate on the invoice date, in practice the ECB reference rate of that day or the day before. More important than the exact source is consistency: pick one method and stick to it for every invoice. Good bookkeeping software converts automatically and records the rate used. For revenue in your profit and loss account the euro amount at invoice date counts; what happens at payment is a separate story.
Exchange differences: gain or loss on receipt
Between invoice date and payment the rate moves, so the euros received almost always differ from the booked revenue. That difference goes not through revenue but to a separate exchange-differences account: positive is profit, negative is cost. Both simply count in your taxable result. Conversion fees and your bank's or provider's spread are business costs too. Receiving foreign currency often? A multi-currency account can cut per-transaction costs considerably; the trade-off resembles choosing your business account.
Worked example: a $ 5,000 invoice
- Revenue booked at invoice date, rate 1.08
- € 4,630
- Received six weeks later, rate 1.10
- € 4,545
- Exchange difference, booked as cost
- € 85
- Bank conversion fee
- € 12, also a cost
Result: Revenue stays € 4,630 in the books; the € 85 loss and € 12 fee sit apart. Revenue, VAT records and bank then always reconcile
Frequently asked questions
May I fix my price in dollars instead of euros?
Yes, that is a commercial choice. Remember your costs run in euros: a falling dollar shrinks your margin. For long contracts in foreign currency a periodic reset or currency clause is wise.
Which rate for my VAT return on reverse-charged revenue?
The same euro conversion as in your records, so the invoice-date rate. Reverse-charged revenue goes into your return and EC sales listing in euros; use the same amount everywhere.
I leave dollars in a dollar account. Must I do anything?
Business currency balances are valued at balance date against the rate of that moment; the change flows through profit as exchange result. Holding large amounts in foreign currency long is thus a tax choice too, not just a practical one.
Do these rules also apply to payments received in crypto?
Broadly yes: you book revenue at the euro value at the time of supply and later value changes are results. Since swings are far larger and rules stricter, converting to euros quickly is the safest route for most freelancers.
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
Need more help with this?
Become a client from just €66 per month. Schedule a no-obligation call and find out what Fiscly can do for you.
Ilias
