Proforma invoice
Also known as: proforma
A proforma invoice is a statement of value without a payment obligation. You use it when goods cross the border without a sale, because Customs still needs a customs value on import.
When do you use a proforma invoice?
You use a proforma invoice when goods cross the border without a sale behind them. Samples, promotional material, warranty exchanges, returns to the supplier, consignment and temporary admission are the classic cases. Customs charges duty on a customs value, not on an invoice somebody has to pay. Without a statement of value, DMS, the Dutch declaration system, refuses the import declaration, even if nobody is buying the goods. That is different from the commercial function of the same proforma. A buyer often asks for it before the shipment exists, to prepare a licence, a documentary credit or an internal approval. For the declarant the only question is whether the shipment is a sale. If there is a sale, a commercial invoice belongs with it, even if the supplier still sends a proforma as well. If there is no sale, the proforma is the statement of value on which you base the customs value, using the method the Union Customs Code requires when there is no transaction value.
Why does Customs reject a proforma when there is a sale?
If there is a sale, the transaction value is the primary basis for the customs value. That value appears on the commercial invoice: the price the buyer actually pays or must pay. A proforma is not proof of payment and not a contractually due amount. If you use it on a real sale, the legal basis is missing and you cannot support the declared value in a control. In practice you see this when the supplier sends the final invoice later, or when the shipment leaves before the accounts team has issued the commercial invoice. For the terminal and the carrier that is not a problem. For the declaration it is. DMS asks for a statistical value and a customs value per item. Those fields must be traceable to a document in the file. A provisional figure without a sale does not stand if a later invoice shows a different amount. If you receive both documents, the commercial invoice is leading. The proforma may stay in the file as an annex, but you do not base the declaration on it.
How do you determine the value on a proforma invoice?
Without a sale there is no transaction value. The Union Customs Code then applies the secondary methods, in order: the transaction value of identical goods, that of similar goods, the deductive method, the computed value, and finally the fallback method. In daily work that usually means: what would this shipment have fetched on an open market, supported by a price list, an earlier sale or a statement from the shipper. Put that support on the proforma itself, not in a loose email. State that it is not a sale, why the goods are moving, and how the value was arrived at. Do not put a token amount of one euro: Customs treats that as avoidance. For samples the value may be the commercial value, with a note that the goods are not intended for sale, or lower if they have been made unusable. Freight and insurance to the external border of the EU also belong in the customs value, even if there is no sale. A proforma that only shows the goods value is not yet complete for the declaration.
What must be on a proforma invoice for the declaration?
The proforma carries the same identifying data as a commercial invoice, minus the payment obligation. Seller and consignee with address, a clear goods description per line, quantity, net weight, the currency, the country of origin, the Incoterm with place, and a document number with date. State explicitly that it is a proforma invoice and that no payment is due. Without that note, a controller sees an ordinary invoice with a missing amount. The description must be specific enough to classify. Sample goods or spare parts is too thin for DMS. Name the product, the material, the purpose (sample, return, warranty) and, if you have it, the goods code. One line per product type, not one amount for the whole shipment. For returns you refer to the original export or import, including the MRN if it is known. The EORI of the consignee in the Union belongs on it if that party is the declarant or the importer. If that number is missing, you cannot link the party in DMS and the declaration stays on Niet Compleet.
How does a proforma work in DMS on import?
In DMS, the Dutch declaration system, a proforma is not a separate document type in the dataset. You file an import declaration (IMA) or a placement in warehouse (STO), with a customs value per item. The document in the file supports that value. On a sale that is the commercial invoice. Without a sale that is the proforma, plus freight and insurance to the external border. The declarant remains responsible for accuracy. Copying a shipper's proforma without testing whether the value is reasonable is the same error as copying a commercial invoice without reading the Incoterm. On temporary admission or a return, the previous declaration also matters: the value must line up with what was previously exported or imported, otherwise the declaration chain breaks. If you later receive a commercial invoice with a different amount, you correct the declaration. If you do not, a subsequent control produces a recovery on the difference, plus the VAT consequences. Keep both documents with the file. In the Netherlands Customs retains for seven years, in line with the tax retention obligation.
Where do proformas go wrong in the file?
The most common problem is a proforma on a real sale. The shipment has been sold, the price is on the order confirmation, but the file only contains a provisional figure. The declarant takes that amount over, the final invoice arrives two weeks later with surcharges or a different currency, and nobody amends the declaration. On a revision that is a classic recovery. The second problem is a sample value that is too low. A shipment with commercial value set down as a sample at one euro stands out in selection. Customs can hold the goods until you supply a supported value, and in the meantime terminal rent runs. The third problem is a proforma without Incoterm, without origin or without a split per item. Then you cannot calculate the customs value or support the goods code, even if a total amount is shown. On intake, check whether the document is a proforma or a commercial invoice, whether there is a sale, and whether value, Incoterm and origin are on the sheet. If any of those three is missing, the file is incomplete.