Dollars, Wise and Payoneer - how foreign currency looks in the books
Your income is born in dollars, passes through Paddle, PayPal or an app store, maybe parks in Wise for a while, and is finally reported in shekels to the Israeli authorities. Along the way it meets exchange rates, conversion fees and small differences nobody explains. This guide makes the route simple: one central rule, three points to watch, and a quarter-hour routine once a month.
The central rule: income is recorded in shekels, at the date of the transaction
An Israeli business reports in shekels. So every item of income in foreign currency is translated into shekels at the exchange rate relevant to the date of the transaction - as a rule, the representative rate published by the Bank of Israel. You sold a $100 subscription on a day when the representative rate was 3.65? That is 365 ILS of income recorded. Full stop. What happens to those dollars afterwards - when you converted, at what rate, how much fee was charged - are separate events, handled separately.
Why this matters: the separation between "the income event" and "the conversion event" is what keeps the books correct. Without it the confusions begin: income recorded by what landed in the bank, fees that disappear, and an annual report that does not reconcile with the Stripe or Paddle statements. Israeli invoicing programs do the translation automatically - it just needs to be configured correctly once.
The full route of a dollar, station by station
| Station | What happens | How it is recorded |
|---|---|---|
| 1. The transaction | A client paid $100 | Income: the shekel value at the representative rate on the transaction date |
| 2. The processing fee | Paddle, PayPal or the store takes its share | A recognized expense (per their report) |
| 3. Parking in Wise, Payoneer or a currency account | The money sits in dollars | A foreign currency balance of the business; no new tax event meanwhile |
| 4. Conversion to shekels | You converted at a rate different from the representative rate on the transaction day | The difference is an exchange difference; the conversion fee is an expense |
| 5. Withdrawal to the Israeli bank | The money lands in the current account | A transfer only, not income |
Watch station 5: this is the classic mistake. The landing in the bank is not the income event - the income was already recorded at station 1. Anyone who records by the bank either counts the money twice or misses it entirely, depending on the day.
Wise, Payoneer and foreign currency accounts - what matters
- They are wallets, not a shelter. A balance in Wise is money of the business in every respect: it exists in the books, it is part of the picture in the annual report, and it will also appear in a capital declaration when one is required. "It is not in Israel yet" is not a tax status.
- Their fees are recognized. Receiving, conversion and transfer fees of Wise or Payoneer are business expenses. Their statements itemize everything; keep them month by month.
- Do not mix private and business. If your Wise is used both for Amazon purchases and for receiving income, open a separate account or sub-account for the business. That separation is worth hours of order at year end.
- Large balances mean a conversation. Anyone accumulating significant currency balances (or holding them for long periods) enters questions of exchange differences, interest and sometimes further tax considerations. Worth a short piece of planning instead of a surprise in the report.
The routine we recommend - a quarter of an hour a month
- Download the month's report from every platform (Paddle, PayPal, Wise).
- Make sure every transaction was recorded in the invoicing software in shekels (in most programs, automatically).
- Reconcile against the bank account and the wallets: differences equal fees plus exchange differences, not mysteries.
- File the reports in the month's folder. Done.
And if even that quarter of an hour seems unnecessary to you, that is exactly what we do in ongoing representation: you send access to the reports, we close the month.
A licensed Israeli CPA (license no. 500125101) accompanying businesses and self-employed clients across Israel - including founders, builders and owners of digital products. Bookkeeping, filings to the authorities, annual reports and personal financial guidance. About Adir →
Official sources
- Bank of Israel - representative exchange rates
- Israel Tax Authority - bookkeeping and reporting rules (Hebrew)
- Kol Zchut - taxation of virtual currencies, for the crypto question (Hebrew)
The information in this guide is general only, current as of August 2026, and does not constitute tax advice or a substitute for professional advice fitted to your business's circumstances. It is a condensed adaptation of our fuller Hebrew guide. For personal advice - talk to us.
Foreign currency in the books - the questions everyone asks
Which rate exactly do I use - the invoice date or the payment date?
The guiding rule is the representative rate at the date of the transaction, and invoicing programs apply this according to the document settings. In small digital transactions the difference between days is a matter of agorot, but the principle matters: you set one consistent rule in the software and do not switch approach every month. The right configuration is done once, at setup.
I converted at a bad rate and ended up with a "loss" against what was recorded. Is that recognized?
Exchange differences are part of the life of a foreign currency business, and they are handled in the books, positively or negatively. At the activity levels of most builders these are small amounts that balance out; as the balances grow, treating exchange differences becomes more material and demands consistency. That is one more argument against letting dollars just sit there without a decision.
Do I need a business bank account, or can I manage with Wise alone?
There is no legal obligation to hold a specifically "business" account at an Israeli bank, but in practice you will need an orderly shekel pipe for payments in Israel: VAT, National Insurance, tax advances. The common combination among builders is Wise or Payoneer for receiving currency plus an Israeli account (separate from the private one as far as possible) for the shekel side. The main things are separation from private money and continuous documentation.
I received a payment in crypto. Same rules?
No. Payment in a cryptographic currency is an entirely separate tax story: the Tax Authority's position treats crypto as an asset, so both receiving it as consideration and converting it into shekels are tax events with rules of their own. If a client offers to pay in crypto, talk to us before you agree, not after.
I am afraid this complexity will eat my time. How much is it really?
After a correct setup, almost nothing: the software translates rates by itself, the reports download in a click, and the monthly reconciliation is a quarter of an hour (or zero, if it sits with us). The real complexity exists only for those managing this in a manual spreadsheet or not managing it at all, and then they pay for it once a year, heavily.