How to Invoice International Clients (Currency, Tax, Wise vs PayPal vs Stripe)

Invoicing a client in another country is mostly the same as invoicing a domestic client — same fields, same payment terms, same follow-up cadence. What changes are three things: which currency you bill in, what tax (if any) applies, and how the money actually moves from their bank to yours without being eaten by fees.

This guide is written for US-based freelancers and small businesses billing clients abroad. The general principles apply elsewhere, but the tax and payment-method specifics assume the US side of the transaction.

For the broader basics, start with the freelance invoice guide.

Currency: bill in USD, theirs, or "their choice"?

Three options, in order of how often each one is right:

1. Bill in USD (default, recommended)

This is the right answer ~80% of the time. You quote and invoice in USD, the client converts when they pay, and you receive USD in your US bank account.

Why this is the default:

• You don't carry FX risk. The dollar's daily moves don't affect what you receive.
• Your accounting is simpler. All revenue is in one currency; nothing to reconcile.
• It matches the client's expectation for a US contractor. Large international companies pay US contractors in USD as a matter of course.

The only friction is that the client carries the FX conversion cost. For corporate clients on big budgets this is a rounding error. For small clients in soft currencies, it can be a real deal-breaker.

2. Bill in the client's currency

Use this when the client explicitly asks for it, or when the client is small enough that the FX cost would actually deter them. Common with European clients (EUR), UK clients (GBP), and Canadian clients (CAD).

The catch: you now carry FX risk. The invoice you quote in EUR for €5,000 might convert to $5,400 today and $5,250 in three weeks. Mitigate this by:

• Quoting in EUR but pricing in USD equivalent. Lock the rate when you send the invoice and don't let scope expand for free during the delay.
• Using a multi-currency receiving account (Wise) that holds the foreign currency until you convert at a moment you choose.

3. "Either currency at the client's choice"

Avoid. It sounds flexible but in practice creates a one-day FX trading exercise where the client picks whichever currency moved most in their favor. Pick one currency per engagement and stick to it.

Tax: do you charge sales tax or VAT?

The short version: usually no, but it depends on three things — your status, the client's location, and what you're selling.

US sales tax on services to international clients

US sales tax is a state-level tax on goods (and in some states, certain services) consumed within that state. Services delivered to a client outside the US are almost never subject to US sales tax, because the consumption is happening abroad.

The narrow exceptions:

• Some states tax SaaS regardless of customer location (rare, narrowing).
• Some states have "destination-based" sourcing where the customer's billing address determines the tax — but a foreign address generally exempts the transaction.

For 95% of freelance services (design, dev, writing, consulting) billed to a client abroad, no US sales tax applies. Don't put a sales-tax line on the invoice.

VAT on services to clients in the EU / UK

This is where it gets country-specific. If you are a US freelancer (no EU/UK business establishment) selling B2B services to a VAT-registered client in the EU or UK:

• You generally do not charge VAT on the invoice.
• The client self-accounts for VAT on their side under the "reverse charge" mechanism.
• Your invoice should note this — e.g., VAT reverse charge applies — recipient to account for VAT.
• You may need the client's VAT number on the invoice (always for the UK; commonly requested in the EU).

For B2C (a private individual in the EU/UK, not a business), the rules are different and more onerous — you may be required to register for VAT in the destination country. Most freelancers serving consumers abroad work around this by selling through a marketplace or platform that handles the VAT.

If you're not sure whether your client is B2B or has a VAT number, ask before sending the invoice. The VAT line is the most common reason an EU client sends an invoice back asking for corrections.

Other jurisdictions

| Jurisdiction | B2B service from US freelancer | Notes | |---|---|---| | Canada (GST/HST) | No GST/HST on invoice | Non-resident with no PE generally doesn't charge GST | | Australia (GST) | No GST on invoice | Similar — services from offshore supplier exempt for the supplier | | UK (VAT) | No VAT on invoice, reverse-charge note required | Client self-accounts | | EU member states (VAT) | No VAT on invoice, reverse-charge note required | Client self-accounts | | Mexico, Brazil, India | Varies — withholding tax common | Client may withhold local tax from your payment; account for it |

For specifics in any country, ask the client what their finance team requires on the invoice. They've paid international contractors before; they know.

What to put on the invoice for an international client

Beyond the standard fields, an international invoice needs:

1. Your full business address with country

US clients can infer the country from a state abbreviation. International clients can't. Always include United States on the address block.

2. Their full business address with country

Same logic. Their AP team needs to know your invoice is for the entity they think it's for.

3. Both parties' tax IDs

• Your EIN (if you have one) or SSN
• Their VAT number for EU/UK clients
• Their GST number for Canadian/Australian clients

The client's tax number isn't always required, but including it on the invoice prevents back-and-forth when their AP team processes it.

4. Currency stated clearly

Don't write $5,000. Write USD 5,000.00 or $5,000 USD. Multiple countries use $ as a currency symbol (CAD, AUD, MXN, …); ambiguity here causes real disputes.

5. Reverse-charge note (EU/UK B2B only)

A footer line like:

VAT reverse charge applies — recipient to account for VAT
under Article 196 of EU Council Directive 2006/112/EC (or local equivalent).

Without this, EU AP teams may reject the invoice or apply VAT incorrectly.

6. Payment method-specific receiving details

If you're using Wise to receive EUR, the invoice should show your Wise EUR account details (IBAN, BIC, beneficiary name). If USD via ACH, show the US ACH details. Don't make the client guess between two payment paths — that's a great way to receive nothing for two weeks.

How to actually receive the money

This is where the choice of payment method makes a 0.5%–5% difference in what you take home. The main options for US freelancers receiving international payments:

Wise (formerly TransferWise) — recommended

What it is: a multi-currency account that gives you local receiving details in USD, EUR, GBP, AUD, CAD, and others.

How it helps:

• Your EU client can pay your EUR IBAN as a local SEPA transfer — they pay nothing extra and don't see "international wire" fees.
• You receive EUR, decide when to convert to USD, and pay Wise's mid-market rate + a small fixed fee (~0.5%).

For most US freelancers with EU/UK/AU/CA clients, Wise is the best option. The total all-in cost is usually 0.5–1% versus 3–5% for PayPal or a bank wire.

Limitation: Wise requires you to verify identity and have a US address. It's straightforward but adds a one-time setup step.

PayPal

What it is: easy to set up, accepted by clients globally, but expensive.

The cost: PayPal charges the receiver (you) a percentage of the payment plus an FX markup of ~3–4% over the mid-market rate when you convert. For a $5,000 invoice from a EUR client, you can lose $200–250 to PayPal fees.

Use PayPal when:

• The client insists on it
• The invoice is small enough that the fee is acceptable
• You don't have Wise set up yet and need to invoice today

Stripe

What it is: typically used for accepting card payments through a checkout, not for sending P2P invoices to enterprise clients. Stripe-issued invoices work but the card-rate fees (~2.9% + $0.30 plus FX) are similar to PayPal.

Use Stripe when:

• Your client base is small businesses paying by card
• You want a hosted invoice page that handles card payments automatically
• The volume justifies the fees

International bank wire (SWIFT)

What it is: traditional bank-to-bank wire.

The cost: $15–50 outgoing fee on the client's side, $10–25 incoming fee on your side, plus a 2–4% FX markup baked into your bank's exchange rate. Slow (1–5 business days).

Use a SWIFT wire when:

• The client's procurement system can't pay any other way (some large enterprises)
• The invoice is large enough ($10k+) that the fixed fees are negligible

Comparison

| Method | Setup | All-in cost | Speed | Best for | |---|---|---|---|---| | Wise (multi-currency) | Medium | ~0.5–1% | 1–2 business days | Default for EU/UK/AU/CA | | PayPal | Easy | 3–5% | Instant–1 day | Small invoices, client preference | | Stripe Invoicing | Medium | ~3% + $0.30 + FX | Instant | Card-paying SMB clients | | SWIFT wire | None | $25–75 + 2–4% FX | 1–5 days | Large enterprise clients |

What to put on the invoice for each method

• Wise (EUR example): show your Wise EUR account name, IBAN, and BIC. Note that it's a local SEPA transfer (no international fees on their side).
• PayPal: show your PayPal email and the payment link.
• Stripe: the Stripe-hosted invoice link is the payment method; nothing else needed.
• SWIFT wire: your bank's name and full address, your full name on the account, account number, your bank's SWIFT/BIC code, your bank's routing number (ABA for US), and the intermediary bank if your bank requires one.

When in doubt, ask the client what their AP system needs. Some big companies will tell you they can only do ACH (in which case Wise's USD-receiving address works), some will only do SWIFT, some will accept either.

Withholding tax — what to do if the client withholds

Some countries (Mexico, Brazil, India, Argentina, the Philippines, …) require local clients to withhold a percentage of payment to a foreign contractor and remit it to their tax authority. The client pays you the net amount, and you receive a withholding certificate.

In the US, you can usually use the withholding certificate to claim a foreign tax credit on your US return (Form 1116), so you're not double-taxed — but you need to plan for the cash-flow hit (the client pays you 80–90% of the invoice; you reconcile the rest at tax time).

When invoicing into a withholding country:

• Ask up front whether withholding will apply and at what rate
• Build the withholding cost into your rate (don't absorb it; raise the invoice by the gross-up amount)
• Require the withholding certificate as part of payment confirmation

This is a CPA conversation. If you're regularly invoicing clients in withholding countries, get advice on the structuring once, then template the process.

FAQ

Do I charge sales tax when invoicing an international client?

For US-based freelancers selling services consumed abroad, no — US sales tax is a state-level tax on consumption within the state, and consumption is happening in the client's country. Don't put a sales-tax line on the invoice.

Do I charge VAT to EU clients?

If the EU client is a VAT-registered business and you're a US-based freelancer with no EU establishment, no — you don't charge VAT. Note "VAT reverse charge applies — recipient to account for VAT" on the invoice and include their VAT number. For private individual customers in the EU, the rules are different and you may need to register for VAT.

What currency should I invoice in?

Default to USD. Bill in the client's currency only if they specifically ask and you've factored the FX risk into your rate. Avoid letting the client choose at payment time.

How do I avoid PayPal's high fees?

Use Wise. Wise gives you local receiving details in EUR, GBP, AUD, CAD, and others — your client pays locally and you pay ~0.5% to convert to USD, versus 3–5% with PayPal. Setup takes 15 minutes.

Does my client need my SWIFT code?

If they're paying you by international wire, yes — your US bank's SWIFT/BIC code goes on the invoice along with your full account details. If they're paying via Wise SEPA/ACH or PayPal, no SWIFT code needed.

How do I price for FX risk if billing in foreign currency?

Two options: (1) lock the FX rate on the day of invoicing and add 1–2% buffer for the typical Net 30 conversion delay; (2) bill in USD instead. Option 2 is usually better unless the client specifically requires their local currency.

Should I include a CC of the client's accounts payable on the invoice email?

Yes, for any client over ~50 employees. Ask the client for the AP email and CC it. International AP cycles are slow; routing the invoice to two inboxes from day one prevents the common "we never got it" delay. See how to send an invoice.

Do I need to report foreign income to the IRS?

Yes. As a US person, you owe US tax on worldwide income regardless of where the client is. The income gets reported on Schedule C just like domestic freelance income. If foreign tax was withheld, you may be able to claim a foreign tax credit (Form 1116) to avoid double taxation.