Currency and Conversion
Invoice in your home currency unless the client requests otherwise. This protects you from exchange rate fluctuations between quote and payment. Include a note: "All amounts in USD" at the top of your invoice.
When to Invoice in Client's Currency
- Client specifically requests it (common with EU/UK clients)
- You have a business bank account in that currency
- You're billing recurring retainers and want predictable amounts
Currency Conversion Best Practices
If invoicing in client's currency, lock in exchange rates at time of quote. Use services like Wise (TransferWise) or Revolut for better rates than traditional banks—typically 1-3% better than bank wire transfers.
VAT, GST, and Sales Tax
Tax requirements vary by country. Generally, if you're a US freelancer invoicing an EU business, you don't charge VAT (they handle it via reverse charge). If you're EU-based invoicing other EU countries, VAT rules depend on your registration status.
Common Scenarios
- US → EU/UK: No VAT charged. Invoice shows "$5,000 + $0 tax = $5,000"
- EU → EU (B2B): Reverse charge (no VAT if client is VAT registered)
- EU → EU (B2C): Charge VAT at destination country rate
- Australia/NZ → Anyone: No GST for international services
Important: Include client's VAT/GST number on invoices if they provide one. This is required for reverse charge mechanism in many countries.
Payment Methods for International Clients
Best Options (Lowest Fees, Fastest)
- Wise (TransferWise): 0.5-1.5% fee, arrives in 1-2 days
- PayPal: 3-4% fee, instant transfer (expensive but convenient)
- Stripe: 2.9% + 30¢ + 1% international fee = ~4% total
- Revolut Business: Low fees, multi-currency accounts
Avoid (High Fees, Slow)
- Bank wire transfers (SWIFT): $25-50 per transaction + bad exchange rates
- Checks: 2-4 weeks to clear, high fees for international checks
Legal and Compliance
You're responsible for reporting international income to your tax authority. Keep records of all foreign payments, exchange rates used, and any foreign taxes withheld. Some countries require you to report foreign income separately on tax returns.
Withholding Tax
Some countries (like US for non-residents) may withhold 30% tax on payments. Use tax treaties to reduce this—requires filing W-8BEN form for US clients. Consult a tax professional for your specific situation.
Invoicing Requirements by Region
EU: Must include your VAT number, client's VAT number, "Reverse charge applies" language if applicable
Australia: Must include your ABN (Australian Business Number)
Canada: Must include your GST/HST number if registered
UK: Must show "No VAT" or reverse charge if invoicing UK businesses
Time Zones and Payment Terms
Be explicit about payment deadlines: "Due 15 days after invoice date" not "Due January 15" (ambiguous with international date formats). Use Net 15 or Net 30 terminology, which is universally understood.