8 March 2023
The Income Tax Act provides specifically that certain amounts expressed in a foreign currency must be translated into rand by the application of an applicable average exchange rate. The South African Reserve Bank (SARB) determines weighted average exchange rates, based on the foreign exchange transactions of commercial banks. SARS publishes these rates on a quarterly basis, which may be used by stakeholders (taxpayers) in the determination of the average exchange rate when required in the Act.
What is average exchange rate?
The “average exchange rate” is defined in section 1(1) of the Act is determined by using the closing spot rates at the end of daily or monthly intervals during a year of assessment. This rate must be applied consistently within that year of assessment.
Table A lists the average exchange rates of selected currencies for a year of assessment from December 2003.
Table B lists the monthly average exchange rates to assist a person whose year of assessment is shorter or longer than 12 months.
You can find the updated average rates for Table A here and for Table B here.
The next update can be expected in June 2023.