Proposals · Glossary
What is a commercial invoice?
A commercial invoice is the document that travels with goods sold across a border. It records the seller, the buyer, what was sold, the quantities, the price and currency, and the country of origin, and customs authorities use it to classify and value the shipment and work out the duty and tax payable.
Anyone shipping a product overseas meets the commercial invoice at the first customs form. It looks like an ordinary invoice, but its main reader is a customs officer rather than the buyer's accounts team.
Nuwan Madhusanka · Co-founder
4 min read · Published
| Commercial invoice | Proforma invoice | Tax invoice (Australia) | |
|---|---|---|---|
| Main purpose | Customs clearance and valuation of goods crossing a border | A quote in invoice form, before the sale is final | Lets a business customer claim the GST credit |
| Who reads it first | Customs authorities and brokers | The buyer, sometimes a bank or importer | The buyer and their accountant |
| When it is issued | When the goods are shipped | Before an order is confirmed or paid | When the sale is made, or within 28 days of a request |
| Key contents | Parties, description, quantities, unit price, currency, origin, freight and insurance | Expected goods, prices and terms | Seller identity and ABN, date, description, GST amount, price |
| Is it a demand for payment | Often also used as one, but its legal job is customs | No | Yes, it records a taxable sale |
What a commercial invoice is for
When goods leave one country and enter another, the importing country needs to know what they are, what they are worth and where they were made. The commercial invoice answers those three questions in one place. The importer's customs broker uses it to lodge the import entry, the authority uses the price to value the goods for duty, and the origin can decide whether a trade agreement rate applies. The exporter usually issues it, and a copy travels with the shipping documents.
What it has to show
Each country sets its own list, and the United States regulation on invoice contents is a useful benchmark because it is detailed. It asks for the port of entry, the names of the buyer and seller, a detailed description of the goods, quantities, the purchase price of each item in the currency of the sale, the kind of currency, charges such as freight, insurance and packing listed separately, any rebates, and the country of origin. GOV.UK guidance for UK exporters lists similar contents and notes that missing details are a common cause of delays at the border.
How it differs from the invoice your customer pays
A domestic tax invoice exists so a business customer can claim the tax back, and the ATO lists what it must show for GST. A commercial invoice exists so a border authority can assess the goods. Exports from Australia are generally GST free, so the GST line on a domestic invoice does not carry over. Many small exporters send both: a commercial invoice in the shipping pack and a normal invoice to the buyer's accounts team, with the same numbers on each.
Common mistakes
Vague descriptions such as gifts or samples, which invite inspection. A price that does not match what the buyer actually paid, which can be treated as undervaluation. Leaving out freight and insurance, which some countries add to the customs value. Missing the country of origin, or giving the country of shipment instead. And sending the commercial invoice without the packing list and export declaration that the Australian Border Force or the carrier asks for, which stops the shipment rather than the payment.
Where it shows up in the product
The proposals module writes invoices for getting paid, not for customs. Each line item carries a name, description, quantity, unit price, unit label, tax rate and discount, and the tax label is GST for AUD and NZD, VAT for GBP and EUR, and Tax otherwise. There is no field for a tariff code, origin or Incoterm, so treat a customs invoice as a separate document, and keep its prices identical to the invoice the buyer pays through the pay link or by bank transfer.
Questions people ask
Does a commercial invoice need to be signed?
Some importing countries and some carriers ask for a signed declaration that the contents are true and correct, and others accept an unsigned invoice. Check the destination's rules or ask your freight forwarder, because a missing declaration is a common reason for a broker to come back with questions before clearance.
Who prepares the commercial invoice, the seller or the courier?
The seller is responsible for the contents, because only the seller knows what was sold and for how much. Couriers and freight forwarders often provide a form or generate one from the details you enter at booking, but the figures and the description still come from you, and errors in them are yours.
Is a commercial invoice needed for samples or gifts?
Usually yes. Goods sent free of charge still need a value for customs, so the invoice states a fair value and marks the goods as no charge or not for resale. Writing a value of zero is a common mistake that leads to the parcel being held while the authority works out a value itself.
What currency should a commercial invoice use?
The currency of the sale, stated clearly. If you invoice a New Zealand buyer in Australian dollars, the commercial invoice should say AUD, not just show a dollar sign. The importing authority converts it at its own rate for duty purposes, so a mismatch between the currency on the invoice and the payment received invites questions.
How long should exporters keep commercial invoices?
Keep them with your other business records for as long as your tax authority requires, which in Australia is generally five years from when the record was prepared or the transaction completed. Customs authorities can audit an import long after clearance, and the invoice is the first document they ask for.
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