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A proforma invoice is not a true / commercial invoice - it is simply a document that declares the seller's commitment to provide the goods or services specified to the buyer at certain prices. A proforma invoice is a common form used in both domestic and even more commonly in international trade to provide buyers as well as in the event of international trade the appropriate import/export authorities, where additional details may be required for customs, with required information about shipment. Proforma invoices are not recorded as an accounts receivable by the seller nor are they recorded as an accounts payable by the buyer. A pro forma invoice is very similar to a sales quote because it is used to formally define the value of a trade prior to shipping or the actual completion of the sale.
According to the HMRC proforma invoices are not VAT invoices, and therefore should be marked with the words 'This is not a VAT invoice'. If the recipient accepts the goods or services offered in the proforma invoice and you in turn supply them, then you must issue a proper VAT invoice within the appropriate time limit. A proforma invoice is a quote in an invoice format that may be required by the buyer to apply for an import license, contract for pre-shipment inspection, open a letter of credit or arrange for transfer of hard currency. A proforma may not be a required shipping document, but it can provide detailed information that buyers need in order to legally import the product.
Note: Incoterms© 2010 Rules - "Incoterms" is a trademark of the International Chamber of Commerce. Incoterms© rules are an internationally recognized standard and are used worldwide in international and domestic contracts for the sale of goods.
- Pro Forma - on wikipedia.org - In trade transactions, a pro forma invoice is a document that states a commitment from the seller to sell goods to the buyer at specified prices and terms.
- International Business Resource Desk at msu.edu - A robust directory of resources allows you to find information ranging from culture and economic information to Trade Tutorials, Trade Law or even Statistical Data Sources. Each resource has been reviewed by an experienced team of researchers to ensure utmost utility.
- International Trade Administration - U.S. Government site. The International Trade Administration, U.S. Department of Commerce, manages this global trade site to provide access to ITA information on promoting trade and investment, strengthening the competitiveness of U.S. industry, and ensuring fair trade and compliance with trade laws and agreements.
- Department of Foreign Affairs & Trade - Australian Government site. Department of Foreign Affairs and Trade. With source of information about international trade policy, regulations and general information on Export and Import to Australia.
- Foreign Affairs & International Trade - Canadian Government site. The mandate of Foreign Affairs, Trade and Development Canada is to manage Canada's diplomatic and consular relations, to encourage the country's international trade and to lead Canada's international development and humanitarian assistance.
- Industry Canada - Canadian Government site. Industry Canada works with Canadians in all areas of the economy and in all parts of the country to improve conditions for investment, enhance Canada's innovation performance, increase Canada's share of global trade and build a fair, efficient and competitive marketplace.
- GOV.UK - UK government's online resource.
- Government Information on Exporting - Export.gov brings together resources from across the U.S. Government to assist American businesses in planning their international sales strategies and succeed in today's global marketplace.
- Importing into the US at cbp.gov - As the world's first full-service border entity, CBP takes a comprehensive approach to border management and control, combining customs, immigration, border security, and agricultural protection into one coordinated and supportive activity.
- Trade Port at tradeport.org - TradePort is a repository of free information and resources for businesses seeking to conduct international trade to and from California. Created in 1996, TradePort is backed by an alliance of regional trade associations that assist California export and import businesses.