Euro Dollar Conversion
You must express amounts on your U.S. tax return in U.S. dollars. This necessitates converting foreign currency, including Euros, into U.S. dollars if you receive income or pay expenses in a foreign currency. Generally, use the prevailing exchange rate (spot rate) on the transaction date.
Certain qualified business units (QBUs) may use a foreign currency as their functional currency. If a QBU’s functional currency isn’t the U.S. dollar, income is determined in that functional currency and then translated to U.S. dollars at the appropriate exchange rate.
Foreign currency gain or loss may need to be recognized on certain transactions. Refer to Section 988 of the Internal Revenue Code and its regulations for detailed information. U.S. tax payments must be made in U.S. dollars to the IRS.
The IRS doesn’t have an official exchange rate but generally accepts any consistently used posted rate. For countries with multiple exchange rates, use the rate relevant to your specific situation. The rates on this page don’t apply to U.S. tax payments. The IRS uses the bank’s conversion rate on the date of conversion, not the date the IRS receives the payment.
For Euro Dollar Conversion not listed in the table below, consult governmental resources or use a consistently applied posted rate. Divide the foreign currency amount by the yearly average exchange rate to convert to U.S. dollars. Multiply the U.S. dollar amount by the rate to convert from U.S. dollars to foreign currency.
| Country | Currency | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|---|
| Euro Zone | Euro | 0.924 | 0.924 | 0.951 | 0.846 | 0.877 |
Image source: IRS Notice 2025-10 showcasing yearly average exchange rates for various currencies, including the Euro, for accurate conversion to US Dollars.
Keep in mind that these are yearly average rates. For precise euro dollar conversion for a specific date, use the current exchange rate. Fluctuations in the exchange rate can impact the final U.S. dollar amount.
Image source: Historical chart illustrating the fluctuations of the Euro against the US Dollar, emphasizing the importance of using a current exchange rate for accurate euro dollar conversion.