USD-priced ERP in Australia: exchange-rate risk and GST on imported software

If your ERP subscription is billed in US dollars, your Australian-dollar cost changes with the exchange rate at every invoice, and you should budget for that movement as a cost line in its own right. On GST: since 1 July 2017, GST has applied to digital services and software supplied from overseas to Australian consumers. A business that is registered for GST is generally not charged GST by an overseas supplier if it gives the supplier its ABN and states that it is GST-registered. In limited cases, such as partly private use or making input-taxed supplies, the business may need to account for GST itself under the reverse charge rules.

This guide is part of the ERP software pricing comparison overview. Exchange rates below are invented examples, not forecasts.

How USD billing changes the budget

Many software vendors set global price lists in USD. Some bill Australian customers in AUD through a local entity; others invoice in USD from overseas. Ask each vendor:

Which currency will the contract and invoices be in?
Which legal entity will invoice you, and is it Australian?
Is the AUD price fixed for the term, or converted at each invoice?
Are card or bank foreign transaction fees likely on your side?

Illustrative example: a contract of USD 30,000 a year. At an exchange rate of 0.68 US dollars per Australian dollar, the AUD cost is 30,000 ÷ 0.68 = about $44,120. If the Australian dollar falls to 0.62, the same invoice costs 30,000 ÷ 0.62 = about $48,390, roughly $4,270 or 9.7% more, with no change in the vendor's price. If it rises to 0.72, the cost falls to about $41,670.

Add bank or card fees. If your bank charges an illustrative 3% foreign transaction fee on a card payment, $48,390 becomes about $49,840.

Managing FX risk

Approach	How it works	Trade-offs
Ask for AUD pricing	Vendor or local reseller invoices in AUD	Removes your FX risk; vendor may build a margin in
Pay annually upfront	Locks the rate for the year	Large cash outlay at once
Multi-currency account	Hold USD bought when the rate suits you	Requires discipline and a bank or provider offering it
Forward contract with your bank	Fix a rate for a future payment	Fees and minimums; suits larger amounts
Budget buffer	Add an FX allowance to the budget	Simple; does not remove risk

For budgeting, many finance teams test the TCO at a rate several cents below today's, as a stress test. That is a planning choice, not a prediction.

GST on imported digital services: the basics

Australia extended GST to imported services and digital products from 1 July 2017. Overseas suppliers selling to Australian consumers above the registration threshold must register for GST and charge it.

For business buyers, the ATO's guidance is:

If your business is registered for GST and the purchase is for your business, the overseas supplier should not charge GST, provided you give your ABN and state that you are GST-registered.
If you are not registered for GST, the supplier may charge GST as it would to a consumer.
You should not quote your ABN for personal purchases; providing false information to a supplier can attract penalties.
If a GST-registered business uses the imported service partly for private purposes or to make input-taxed supplies (for example, some financial supplies), it may have to pay GST under the reverse charge for that portion and report it on its BAS.

If an overseas supplier has charged you GST in error, ask the supplier for a refund or adjustment; you generally cannot claim it as an input tax credit unless you hold a valid tax invoice. Check the ATO's current guidance and your tax agent.

When the ERP is bought from an Australian partner

Many mid-market ERP subscriptions are resold by Australian partners. In that case the partner, if registered for GST, issues a tax invoice including 10% GST, and a GST-registered business generally claims it back as an input tax credit. The partner's own costs in USD are its problem, but its contract may let it pass on currency movements. Look for clauses such as "prices may be adjusted to reflect changes in exchange rates" and negotiate a cap or a fixed AUD price for the term.

Putting currency into your TCO

Convert each year's USD subscription at a base rate.
Run a second scenario at a lower rate.
Add foreign transaction fees if paying by card.
Treat GST correctly: excluded for a GST-registered business that can claim credits, included for an unregistered business.
Add the currency allowance to your TCO estimate.

A currency fall at renewal compounds with a vendor price uplift. A 5% uplift and a currency move that makes each US dollar cost 6% more in AUD, in the same year, raise the AUD cost by about 1.05 × 1.06 − 1 = 11.3%. Use the renewal uplift calculator with the combined percentage, and read the renewal uplift worked example.

Currency also matters on exit, because migration and transition services may be billed in USD. See planning your exit and the 2026 compliance guide for the other Australian rules a foreign product must handle.

Frequently asked questions

Why did my overseas software invoice include GST?

Usually because the supplier's records show you as a consumer: no ABN given, or GST registration not stated. Update your billing profile with your ABN and GST status and ask for a correction.

Can I claim GST on a USD invoice?

Only where you hold a valid tax invoice for a taxable supply. If the supplier correctly did not charge GST, there is nothing to claim. Ask your tax agent about your situation.

Is a USD contract always more expensive?

No. If the Australian dollar rises, a USD contract becomes cheaper. The issue is unpredictability, not direction.

Do implementation partners bill in USD?

Australian partners usually bill in AUD with GST. Offshore partners may bill in USD. Ask before you sign.

Sources

Australian Taxation Office — GST on imported services and digital products, and Australian businesses importing services
Reserve Bank of Australia — historical exchange rate data
Australian Business Register — confirming your ABN and GST registration details