Proforma Invoice Explained: Why It’s Not a VAT Invoice

• A proforma invoice is a preliminary quote-like document issued before a sale is finalized; it is not an official accounting document and has no legal/accounting standing.
• It is not a VAT invoice, so it cannot be used to reclaim input VAT and does not create output VAT for the seller unless payment is received.
• It should be clearly labeled “proforma invoice” and ideally state “This is not a VAT invoice.”
• It must not use standard invoice numbering, be entered in sales ledgers, or be included on VAT returns.
• If payment is made before delivery, a tax point is created and a proper sequential VAT invoice must be issued; for some cross-border B2B sales, it should explain that no VAT is charged due to reverse charge rules.

Source: quaderno.io

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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