Commercial Invoice

A commercial invoice is the primary document in international trade transactions, issued by the seller (exporter) to the buyer (importer) to record the sale. Beyond its role as a billing document, it serves as the foundational customs declaration document — the information on the commercial invoice directly determines how customs classifies the goods, calculates the duty, and decides whether to allow import.

What a Commercial Invoice Must Contain

For customs purposes, a commercial invoice must include:

• Seller and buyer details: Full legal names, addresses, and — increasingly for import entry purposes — EORI numbers (EU), IRS/EIN numbers (US), or equivalent tax identifiers
• Invoice number and date
• Country of origin: Where the goods were manufactured or substantially transformed
• Description of goods: Specific enough for customs classification — "electrical components" is insufficient; "AC-DC rectifier modules for household appliances, rated 100W" is appropriate
• HS code / tariff classification: Many countries require or strongly benefit from having the HS code on the invoice
• Quantity: Number of units, and unit of measure
• Unit price and total value: In the transaction currency
• Currency of invoice
• Incoterms: The agreed trade terms (FOB Shanghai, CIF New York, etc.)
• Terms of payment: Net 30, LC at sight, etc.
• Marks and numbers: Reference to any shipping marks on the packages
• Shipping information: Vessel name, port of loading, port of destination (for ocean shipments)

Customs Valuation

The commercial invoice value forms the basis of customs valuation using the Transaction Value method — the price actually paid or payable for the goods. Customs authorities scrutinize invoice values closely because undervaluing imports ("double-invoicing" — one invoice for the bank/customs, one reflecting the real price) is one of the most common forms of customs fraud.

Penalties for invoice fraud include: seized goods, back-duties with interest, civil penalties up to 4× the unpaid duties, and in egregious cases, criminal prosecution.

Common Invoice Errors That Cause Customs Delays

• Vague description: Generic descriptions that don't allow classification
• Missing origin: Omitting country of origin or stating "various"
• Currency mismatch: Invoice in one currency, entry filed in another without proper conversion documentation
• Incomplete seller/buyer information: Missing address, tax ID, or contact details
• Incorrect Incoterms: Using sea-specific terms (FOB) for air shipments
• Related-party transactions: Sales between related companies require customs to verify the price reflects fair market value

Pro Forma Invoice vs. Commercial Invoice

A pro forma invoice is a preliminary document sent before shipment to confirm order details, arrange payment, or obtain an import license. It looks like a commercial invoice but is explicitly labeled "pro forma." A commercial invoice is the actual billing document, issued after or at time of shipment, and the one used for customs entry.