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During the expansion of cross-border business activities, many businesses generate revenue denominated in foreign currencies from overseas customers or e-commerce platforms such as Amazon, Shopify, and Etsy.
One of the key considerations for businesses is determining the appropriate exchange rate when issuing invoices and ensuring consistency between electronic invoices, accounting records, and tax documentation.
The inappropriate application of exchange rates may result in discrepancies in revenue figures, receivable balances, tax declarations, and additional explanations required during tax authority reviews.
1. Exchange Rate Presented on Invoices for Foreign Currency Transactions
Under current regulations on electronic invoices, where transactions arise in foreign currencies, businesses may present transaction values in foreign currencies on invoices and are required to simultaneously disclose the exchange rate applied for conversion into Vietnamese Dong (VND) in accordance with applicable regulations.
According to the guidance under Official Letter No. 6810/CT-QLNT, the exchange rate presented on invoices is determined based on the actual transaction exchange rate under accounting regulations, rather than automatically applying the exchange rate used for customs tax calculation purposes.
Accordingly, businesses should establish an appropriate exchange rate determination policy and apply it consistently throughout the accounting period.
2. Determination of Actual Transaction Exchange Rate
According to Circular No. 99/2025/TT-BTC, businesses may select an appropriate method for determining the actual transaction exchange rate in accordance with their accounting policies, including:
- The average telegraphic transfer buying and selling rate of the commercial bank with which the business regularly conducts transactions on the transaction date; or
- An approximate exchange rate, provided that the applicable conditions are satisfied and the impact on the financial statements is not material (provided that the difference does not exceed the allowable limit of ±1% compared with the average telegraphic transfer buying and selling rate).
Businesses should determine consistently the reference bank, exchange rate determination methodology, and retain supporting documentation evidencing the applied exchange rate to provide an appropriate basis for explanation when required.
3. Distinction Between Different Types of Exchange Rates
A foreign currency transaction may involve different exchange rates for different purposes:
|
Exchange rate |
Purpose of application |
Basis of determination
|
|
Exchange rate presented on invoices |
Presentation of converted transaction values on electronic invoices |
Actual transaction exchange rate under accounting regulations |
|
Customs exchange rate |
Determination of customs value for import and export tax purposes |
Applicable customs regulations |
|
Accounting exchange rate |
Recognition of revenue, receivables, cash balances, and foreign exchange differences |
Enterprise accounting policies |
These exchange rates serve different purposes. Therefore, differences in VND-equivalent amounts between invoices, customs declarations, and accounting records do not necessarily constitute errors, provided that businesses have applied the relevant regulations appropriately.
4. Timing for Applying Exchange Rates
The applicable exchange rate should correspond to the invoice issuance date. Businesses should accurately determine the date on which the invoice issuance obligation arises before selecting the applicable exchange rate.
Common scenarios include:
- Sale of goods: The actual transaction exchange rate applicable on the invoice issuance date should be applied.
- Export of goods: The invoice should be issued in accordance with applicable export invoice regulations, and the exchange rate applicable on the invoice issuance date should be applied.
- Provision of services: The exchange rate applicable at the time the service is completed should be applied, or at the payment receipt date where payment is received in advance or during the service provision period.
For advance payments received from customers, businesses should note that the revenue corresponding to the advance payment may require application of the exchange rate applicable on the payment receipt date under accounting regulations.
5. Treatment of Foreign Exchange Differences
Foreign currency revenue is generally recognized at the exchange rate applicable on the invoice issuance date, while cash collection may occur at a later date (particularly for e-commerce platforms with separate settlement cycles).
The difference between the exchange rate at the revenue recognition date and the exchange rate at the collection date is treated as a foreign exchange difference:
- Foreign exchange gains: recognized as financial income.
- Foreign exchange losses: recognized as financial expenses.
These foreign exchange differences affect the financial results of the business but do not change the revenue amount already recognized on the invoice.
6. Recommendations for Businesses Generating Foreign Currency Revenue
To minimize data discrepancies and enhance compliance management, businesses should:
- Establish internal policies regarding the selection of reference banks and exchange rate determination methodologies.
- Ensure data synchronization among sales functions, import-export departments, accounting teams, and electronic invoice systems.
- Maintain exchange rate records as supporting documentation for the applied exchange rates.
- Perform periodic reconciliation between revenue recorded on invoices, accounting records, and settlement reports from e-commerce platforms.
Establishing a consistent foreign currency exchange rate management process not only supports compliance with applicable regulations but also reduces risks during audit procedures, tax authority reviews, and tax finalization processes.
7. Technology Application in Foreign Currency Invoice Management – GenInvoice
For businesses with a large volume of foreign currency transactions, particularly cross-border e-commerce sellers, manually determining exchange rates, issuing invoices, and reconciling transaction data may increase the risk of errors and require significant operational resources.
To address these challenges, businesses may consider applying technology solutions to automate sales data processing and electronic invoice issuance processes.
GenInvoice is a solution that supports businesses in automating invoice issuance based on transaction data, particularly suitable for business models involving high transaction volumes, multiple currencies, and cross-border transactions.
The solution supports businesses in:
Automated input data processing
Sales data from e-commerce platforms can be standardized before invoice issuance, reducing manual data entry activities.
Support for transaction-based exchange rate application
Instead of applying a fixed exchange rate throughout the accounting period, the system supports businesses in managing exchange rates based on transaction dates and the selected exchange rate policy.
Enhanced data reconciliation capability
Businesses can efficiently reconcile:
- Sales transaction data;
- Electronic invoices;
- Settlement reports from e-commerce platforms; and
- Accounting records.
Improved control and documentation management
Maintaining transaction data, applied exchange rates, and processing history provides businesses with supporting documentation for audit procedures or discussions with tax authorities.
By combining appropriate accounting policies, effective internal control procedures, and technology solutions such as GenInvoice, businesses can enhance the efficiency of foreign currency revenue management and mitigate compliance risks.
Contact Us
If your business requires support in establishing foreign currency revenue management processes, determining exchange rates applied for e-invoice issuance, standardizing accounting data, or implementing electronic invoice automation solutions for cross-border operations, please contact Sliner for tailored advisory support based on your business requirements.
Sliner provides accounting, tax, and finance process automation solutions to help businesses enhance operational efficiency, strengthen data controls, and mitigate compliance risks in an increasingly digital and cross-border business environment.
