Invoicing basics

Pro-forma invoice vs tax invoice: what is the difference?

A pro-forma invoice looks like an invoice but works like a quote. It tells the buyer what they will owe, so they can pay a deposit, arrange a letter of credit or clear customs. It is normally not the document you reclaim tax with.

By the InvoiceDesk editorial team · Published 21 October 2026 · Updated 28 October 2026 · How we write

What a pro-forma invoice is

“Pro forma” is Latin for “as a matter of form”. A pro-forma invoice is issued before goods or services are delivered. It lists what will be supplied, at what price, on what terms. It is a preview, not a demand for payment under a completed sale, and it should be clearly marked “Pro-forma invoice – not a tax invoice”.

Pro-forma vs tax invoice

	Pro-forma invoice	Tax invoice
Issued	Before supply	On or after supply (or payment, depending on country)
Purpose	Preview price, secure deposit, support customs or finance	Record a sale and support tax claims
Tax recovery	Generally not accepted	Accepted when it meets the rules
Numbering	Separate series recommended	Unique sequential series
Accounting entry	None until payment or invoice	Creates a sale and, where relevant, a tax liability

When pro-forma invoices are useful

Prepayment or deposit. A customer’s finance team may need a document to approve a payment before goods ship.
Export and customs. Customs authorities often ask for a pro-forma or commercial invoice describing value, origin and Incoterms.
Letters of credit and bank approvals. Banks use the pro-forma to confirm the deal.
Quotations for formal approval. Some buyers want an invoice-like document for budgeting.

Use the pro-forma invoice generator for a document with the right wording and a clear “not a tax invoice” note.

The tax catch

In many countries, a deposit or advance payment can create a tax point even if no final invoice exists. For example, VAT in the UK and EU can become due when you receive payment in advance. In that case a proper tax invoice for the advance may be needed. This depends on the country and the supply, so check your tax authority’s guidance. See deposits and milestone billing.

What to do after a pro-forma

The customer agrees and pays a deposit if required.
You supply the goods or services.
You issue a tax invoice with its own number, referencing the pro-forma and deducting any deposit already paid.

Check official guidance. We could not fully confirm these points against an official page when we last reviewed, so please verify them before relying on them:

Whether a deposit creates a tax point and needs a tax invoice differs by country and by supply. Check your tax authority’s guidance.

Frequently asked questions

Is a pro-forma invoice legally binding?

Usually no. It is a statement of intended terms, but it may be used as evidence of what was agreed. Say what you mean in the wording.

Can a customer claim VAT or GST on a pro-forma?

Generally not. Tax recovery requires a valid tax invoice. Issue one when the sale is completed or when tax rules say it is due.

What is a commercial invoice?

A commercial invoice is used for international shipments and customs. It states value, origin, and Incoterms. It is a final document for the sale, while a pro-forma is a preview.

Should a pro-forma use my normal invoice numbers?

No. Use a separate series so that your tax invoice numbers stay unique and in order.

Does a pro-forma need an expiry date?

It is good practice. Prices, exchange rates and availability change.