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When the buyer is paying cash, how and when is sales tax calculated when payment is made with a foreign currency? Guessing it's the same as if the transaction had been paid in currency the tax is payable in, and the sales tax is calculated as if the foreign currency had been exchanged real-time to the the currency the tax is payable in, but really have no idea. Also, while I guess semi-related, if for some reason there's a profit realized during the currency exchange, must that also be taxed? |
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You should separate the transactions then it will make sense. Transaction 1: You sell the item to a customer paying in dollars and calculate taxes as needed, getting the full amount of price + tax. Transaction 2: You pay this amount to yourself for this item and convert it at some rate and receive the foreign currency from the customer for the dollar amount you have fronted. Transaction 3: You sell the foreign currency to someone at a different rate and now you have dollars again. Transaction 2 and 3 are not subject to sales tax (yet) they are currency operations. It's taxed at standard income rates as far as I know but you would need to get a confirmation from an accountant. |
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