Invoices in Foreign Currency 
Invoices in Foreign Currency
Use
When you enter an invoice denominated in foreign currency, no matter which exchange rate you use to convert the invoice to baht, you must calculate the amount of tax to withhold using the previous day's exchange rate as published by the Bank of Thailand (see the example below).
The Bank of Thailand always publishes the exchange rate from the previous day. For example, on Wednesdays it publishes the exchange rate from Tuesday.
Activities
Customizing
In order to have the system automatically use the correct exchange rates, in Customizing:
Define a new exchange rate type specifically for this purpose.
To do so, in Customizing for General Settings, choose Currencies ® Define Translation Ratios for Currency Translation.
In Customizing for Financial Accounting (FI), choose Financial Accounting Global Settings ® Withholding Tax ® Extended Withholding Tax ® Calculation ® Withholding Tax Type ® Define Exchange Rate Type for Withholding Tax Type.
In addition to these basic settings, you must maintain the exchange rate for each currency pair every day. Each day, enter the exchange rate announced by the Bank of Thailand for that date (that is, yesterday's exchange rate).
Day-to-Day Activities
Whenever you enter a document that includes a withholding tax item for an item in foreign currency, the system automatically converts it into baht using the appropriate exchange rate.
Example
On 3 March a vendor from the United States sends you an invoice for services rendered for USD 1,000, which you enter in the system. The exchange rate is THB 30:USD 1, so the system records the amount as THB 30,000.
On 15 March you pay the invoice. However, you are obligated to withhold tax at 10% on this payment (USD 100) so you pay the vendor only USD 900. Since 3 March the baht has fallen against the dollar – the exchange rate is now 35:1 – so that the equivalent is THB 31,500.
You calculate the withholding tax by applying the previous day’s exchange rate (40:1), which gives THB 4,000 (USD 100 ´ 40 = THB 4,000).
That means that instead of the original THB 30,000 that you thought you would have to pay for the invoice, you have instead had to pay THB 35,500. The difference, THB 5,500, you post to an account for gains and losses on foreign currency.
