How to Invoice International Clients: Currency, Tax, and Payment

You have three options when billing internationally:

• Your home currency — The simplest option for you; all FX risk falls on the client. Many clients, especially in the US and EU, accept this without question.
• Client's home currency — Makes life easier for the client; you bear the FX risk. Protect yourself with a clause like: "Prices quoted in USD as of [date]. Rate to be confirmed at time of payment."
• A neutral reserve currency (USD or EUR) — Often the best compromise when both parties are in emerging markets or when long payment terms create FX exposure.

Regardless of which currency you choose, state it explicitly on the invoice (e.g., "Total: $2,500 USD") to avoid ambiguity.

Tax obligations on international invoices depend on where your client is and what you're selling:

• B2B services to EU clients — Under the EU VAT reverse charge mechanism, you typically don't charge VAT. The client self-accounts for VAT in their country. Include their VAT number on the invoice and the note "VAT reverse charge applies."
• B2C services to EU clients — You may be required to register for VAT in each EU member state (or use the EU One Stop Shop scheme).
• Australian GST — Exports of services are generally GST-free if the client is non-resident and the service is not performed in Australia.
• US clients — The US has no federal VAT/GST. Sales tax applies to physical goods and some digital services depending on state rules.

When in doubt, ask your client for their tax ID (VAT number, EIN, ABN) and consult a local accountant for the specific rules in their country.

Some countries require clients to withhold a percentage of payment and remit it directly to their government — you only receive the net amount. Common withholding rates: India (10% TDS), Philippines (2%), Brazil (varies by service type).

To handle this correctly:

1. Ask your client upfront whether withholding tax applies.
2. Gross up your invoice so that you receive your target amount after withholding. Example: if you want $1,000 and the rate is 10%, invoice for $1,111.11 ($1,111.11 × 90% = $1,000).
3. Request a withholding tax certificate from your client — you may be able to claim a foreign tax credit in your home country.

Choose based on invoice size and your client's location:

• Wise (formerly TransferWise) — Best exchange rates for bank transfers; supports 50+ currencies. Ideal for invoices over $500.
• PayPal — Convenient but charges 3–5% in FX fees. Fine for small invoices under $200 where the fee is tolerable.
• Stripe — Excellent for ongoing billing relationships; supports multi-currency charging and automatic FX conversion.
• SWIFT wire transfer — The standard for large invoices ($5,000+). Fees are $20–50 flat, so they become negligible at higher amounts. Allow 3–5 business days.
• Cryptocurrency — Instant, low fees, borderless — but FX volatility and accounting complexity are real downsides.

If you're invoicing in a foreign currency with long payment terms, a 5–10% FX move between invoice date and payment date can wipe out your margin. Options:

• Invoice in your home currency (simplest).
• Add an FX clause: "If the exchange rate moves more than 3% between invoice date and payment date, the invoice amount will be adjusted accordingly."
• Use a forward contract through your bank to lock in today's rate for a future payment.
• Shorten payment terms to reduce the window of exposure.