Businesses frequently face a dilemma: which exchange rate is to be used to translate invoices issued in foreign currencies.

In particular, when adjusting intra-Community transactions, they often ask if the rate to be used is that in force on the date of the original invoice or of the correcting invoice.

Tax authorities have tended in recent years to rule that when an intra-Community transaction needs adjustment due to a new circumstance, the proper exchange rate to be applied is that in force on the day preceding the date of the correcting invoice.

But the case of our client shows that what the tax authorities rule in specific cases may differ from their general approach. Persuaded by our argument in the application, the tax authority dealing with our client’s issue agreed with our position even though it was different from what had been otherwise held in cases of this kind.

A lesson learned is that, when applying for a tax ruling, it is not always necessary to follow the current line of authority. If its conclusions can complicate our business, we may well consider seeking an individual resolution. In such a case it is worthwhile to ensure that your case is supported by a robust argument.