What is Commercial Invoice?

Commercial invoice is a customs document. It is used as a customs declaration provided by the person or corporation that is exporting an item across international borders. Although there is no standard format, the document must include a few specific pieces of information such as the parties involved in the shipping transaction, the goods being transported, the country of manufacture, and the Harmonized System codes for those goods. A commercial invoice must often include a statement certifying that the invoice is true, and a signature. A commercial invoice is used to calculate tariffs, international commercial terms, and is commonly used for customs purposes. Commercial Invoices are generally not needed for shipments between EU Countries—just between EU Countries and non-EU Countries.

Key takeaways:

A commercial invoice is a required document for the export and import clearance process. It is sometimes used for foreign exchange purposes. In the buyer’s country, it is the document that is used by their customs officials to assess import duties and taxes.

The commercial invoice details the price(s), value, and quantity of the goods being sold. It should also include the trade or sale conditions agreed upon by both buyer and seller of the transaction being carried out.

Commercial invoice may also be required for payment purposes (such as in the event of payment via Letter of Credit and may need to be produced by the buyer to its bank to instruct the release of funds to the seller for payment.

A complete and accurate Commercial Invoice is actually a legal requirement.

Details that should be included in a Commercial Invoice:

1.Information related to the transaction:

Invoice number

Invoice date

Order number

Total sale amount

Currency

Payment instructions

2.Information related to the exporter and importer

Exporter/seller information (name, address, phone number, etc.)

Exporter/seller’s tax identification number (eg. VAT, EORI, etc.)

Importer/buyer information (name, address, phone number, etc.)

Importer/buyer’s tax identification number (eg. VAT, EORI, etc.)

Notify party’s information

3.Information related to the shipping of the merchandise

Bill of Lading number

Forwarding agent

HS code

Clear description of goods (no. of packages, units, weight, etc.)

Incoterm under which the merchandise has been sold

Origin of merchandise

Insurance

Date of exportation, means of transport, and final destination

Shipper’s signature

The Difference Between a Commercial Invoice and an Invoice:

An invoice is a bill issued by a business after the delivery of a product or service, to detail the sale and to request payment. A commercial invoice, on the other hand, is a type of invoice used for international deliveries.

Notes:

Before completing a commercial invoice for a new export destination, it is advisable to consult reliable sources for country-specific requirements. A few countries require the invoice to be on a specific form, but for most countries, the seller or exporters version is acceptable as long as all the pertinent information is included.

Unlike the Bill of Lading, the commercial invoice does not indicate the ownership of goods nor does it carry a title to the goods being sold. It is, however, required for customs clearance purposes to calculate and assess the duties and taxes due.

A complete and accurate Commercial Invoice is actually a legal requirement. Failing to do so can result in long Customs delays and potential fees. Furthermore, misinformation on a Customs invoice can lead to underpayment for duties and taxes which could, in turn, result in legal ramifications.