May I invoice in dollars or francs?
Yes. German law does not prescribe an invoice currency, and EU law allows any currency (Article 230 of the VAT Directive). For your taxes, though, you work in euros: you calculate VAT with the monthly rate of the Federal Ministry of Finance, and the income in your EÜR at its euro value on the day the money arrives. The two figures can differ, and that is fine.
Mostly this is about customers outside the eurozone: an agency in Zurich, a startup in the US, a publisher in London. For many of them no German VAT is due at all, see invoicing clients outside the EU. You still convert, because you report sales that are not taxable in Germany in euros too.
What goes on the invoice
The invoice names the currency your customer pays in, ideally with the ISO code such as USD, CHF or GBP. Every other mandatory detail stays the same.
If the invoice charges German VAT, the tax amount must also appear in euros. Article 230 of the VAT Directive requires this, and the tax amount is one of the mandatory details under § 14 (4) sentence 1 No. 8 UStG. An example with 19% VAT:
| Item | Amount |
|---|---|
| Net | USD 2,000.00 |
| VAT 19% | USD 380.00 |
| Gross | USD 2,380.00 |
| VAT in euros, sample rate €1 = USD 1.1650 | €326.18 |
If no German VAT is due, for example under reverse charge or for a service outside the EU, there is no tax amount to state in euros. You still report the sale in euros.
Which rate applies for VAT
§ 16 (6) UStG sets how you convert a foreign currency into euros for VAT:
- Monthly rate. As a rule, the average rate the Federal Ministry of Finance publishes for the month in which you perform the service applies. If you receive a down payment first, the month in which it arrives applies to it.
- Cash accounting. If you pay VAT on payments received, you use the monthly rate of the month in which the money arrives.
- Daily rate. The tax office can allow you to convert at the daily rate. You then prove the rate with a bank advice or an exchange rate list.
The Federal Ministry of Finance publishes the VAT exchange rates every month, for 2026 in a running overview. For simplicity, the tax office can also allow you under section 16.4 UStAE to use the previous month’s rates as a rule.
If the rate changes between the service and the payment, the VAT stays as it is. Section 16.4 UStAE says expressly that such rate changes are ignored. So you do not have to correct your VAT return if the dollar falls before your customer pays.
An example
In September you design a website for an agency in New York and invoice USD 2,000. The service goes to a customer outside the EU, so no German VAT is due. For the September VAT return you convert the USD 2,000 into euros at the VAT exchange rate for September and enter the amount in field 45. If the agency pays only in November, that figure stays. For the EÜR, on the other hand, what arrives in your account in euros in November counts.
How the amounts reach the form fields is in the guide to the VAT return.
Foreign currency in the EÜR
In the profit statement, income counts in the year you receive it (§ 11 (1) EStG). What matters is its value in euros at that moment, not the rate on the invoice date.
That has a practical consequence: an exchange difference between invoice and payment does not show up as a separate item in the EÜR. It is simply part of the amount you receive. If an invoice for USD 2,000 brings you €1,830 after conversion, that is your income in euros.
For costs:
- Bank fees and payment provider fees, for example for international transfers or the conversion, are business expenses (§ 4 (4) EStG). Record them separately instead of netting them against the income, so it stays clear what your customer paid.
- An account in a foreign currency makes things more involved, because the money is exchanged into euros only later. How to record receipt and exchange is worth settling once with your tax advisor. The guide to the EÜR explains the basics.
You probably know receipts in a foreign currency too, such as software billed in dollars. For your expenses, the euro amount that left your account counts. If the receipt shows German VAT, you convert the input tax under § 16 (6) UStG as well.
Practical tips
- Agree on the currency in the quote, so the invoice brings no surprise.
- Settle who bears the fees for international transfers. Outside the euro area, several banks along the way often take a cut.
- Put IBAN and BIC on the invoice. Customers outside the euro area need both so the transfer arrives safely.
- Keep the bank advice for the incoming payment. It shows the euro amount and the rate your bank used.
This guide explains the rules in general and is not tax advice.
Common questions
May I use my bank’s exchange rate?
For VAT, the monthly rate of the Federal Ministry of Finance applies. You may use your bank’s daily rate only if the tax office has allowed it (§ 16 (6) UStG). For the EÜR, on the other hand, the euro value you actually receive when the payment arrives counts.
Does the invoice have to show the net amount in euros too?
Article 230 of the VAT Directive requires the euro amount for the VAT. Many invoices also show net and gross in euros for clarity, which is allowed and makes your customer’s bookkeeping easier.
Does this apply to customers in EU countries without the euro?
Yes. Customers in Poland, Sweden or Denmark often pay in their own currency too. For VAT you convert the amounts into euros under the same rules, even if no German tax is due because of reverse charge.