Handling foreign currency exchanges for Freelancers

As freelancers here in Singapore, we often have to purchase goods/services online which are often not priced in Singapore Dollars.

So how then do we account for it in our yearly tax declaration to IRAS?

According to the folks:

These amounts [price] in Singapore dollars may be shown separately beside their respective amount 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 newspaper. This exchange rate must be updated at least once every three months and be used consistently for internal business reporting, accounting and GST purposes. The source must also be used consistently for at least one year from the end of the accounting period in which the method was first used.

So in summary, make sure you choose a source to determine how your currency exchange rate is going to be and keep checking back every 3 months to update your rates. You also should not change your source for at least a year.