Not sure what a foreign exchange transaction is? If so, here's an explanation for you.
Foreign exchange transactions explained
According to the Practical Accountancy Loose Leaf, a foreign exchange transaction is a transaction where you buy or sell an asset, which is denominated in a foreign currency.
The two most common foreign exchange transactions are:
You need to be very careful when you deal with foreign exchange transactions.
SARS scrutinises these.
But there's no need to worry.
We'll help you make sure your foreign exchange transactions stay on the right side of SARS.
There are two significant foreign exchange risks you might come across.
#1: If you owe money to someone overseas and the exchange rate increases, you might end up owing him a lot more money than you originally did.
#2: If you receive money from someone overseas, and the exchange rate strengthens in favour of the rand, you might end up receiving less money than you originally hoped!
Luckily, there's a way to deal with these foreign exchange risks.
Follow these five easy steps when dealing with foreign exchange transactions
Knowing what foreign exchange transactions are and how to deal with them will help ensure you're on the right side of SARS.
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