Guidelines for processing invoices and proforma invoices in cross-border e-commerce
In cross-border e-commerce transactions, invoices and proforma invoices are crucial documents. These documents are not only used for settlement, but also play an important role in customs clearance and tax filing. This article will summarize the functions, processing procedures and matters needing attention of invoices and proforma invoices.
Functions of invoices and proforma invoices
Invoice
An invoice, or commercial invoice, is a document issued by an exporter that details the name, quantity, unit price, total value and other information of the goods. Although the format of the invoice is informal, it must contain multiple elements. Such as invoice number, ticket issuance time, etc. Especially in the process of applying for commodity inspection, applying for certificate of origin, customs declaration and payment collection, the importance of commercial invoices is self-evident. There will usually be the words “E.&.O.E.” at the end of the invoice to indicate that any errors can be corrected.
Proforma Invoice
The proforma invoice is similar in style to a commercial invoice and is mainly used for quoting and confirming transactions. For transactions that require import licenses or foreign exchange quotas, customers usually require proforma invoices. In addition, when using international express to send goods, the proforma invoice also serves as the basis for the express company’s customs declaration. Terms such as delivery date can be added to the proforma invoice as needed to ensure the smooth progress of the transaction.
Response strategies for customers’ low-value invoice requests
In foreign trade transactions, customers sometimes request invoices that are lower than the actual transaction amount in order to avoid taxes or bypass customs clearance obstacles. This kind of request needs to be handled with special caution because it involves certain legal risks.
Communication confirmation
Enterprises should first conduct in-depth communication with customers to understand their real needs and purposes, and clearly inform them of the possible consequences of low-value invoices, allowing customers to weigh the pros and cons on their own.
Provide compliance solutions
Provide customers with commercial invoice issuance solutions that comply with regulations to ensure that the invoice amount is consistent with the actual transaction. At the same time, we can assist customers in understanding and complying with local import regulations, thereby legally reducing tax burdens.
Prepare alternative plans
Enterprises can prepare two sets of invoice data for customers to ensure that if problems arise with low-value invoices, customers can use regular invoices to complete customs clearance in a timely manner.
Reply after receiving invoice request
When receiving an email from a customer requesting to send a proforma invoice, the salesperson should immediately create a proforma invoice and convert it to PDF format, and reply to the customer along with the email. At this time, the salesperson should first thank the customer for placing the order and inform The proforma invoice has been prepared and attached to the email. At the same time, it indicates that all terms are written in accordance with the content negotiated in advance. If there is no objection, the customer is requested to pay as soon as possible to facilitate production or delivery.
Example reply
Dear xxx,
I am pleased that we have agreed finally on the price and all the related trade clauses. Attached please find the PI with my signature. Please inform me as soon as possible once the deposit is paid so that we start production immediately. Yours sincerely, xxx .
VAT invoice issues in cross-border e-commerce
In cross-border e-commerce exports, it is usually not necessary to provide a VAT invoice because these transactions are considered tax-free, but sellers still need to follow relevant tax regulations. Specifically including:
- Understand the tax regulations of the target market: Different countries or regions have different tax regulations for cross-border e-commerce exports, and sellers should fully understand this.
- Keep relevant documents: Although there is no VAT invoice, you still need to keep export-related documents such as export certificates and transaction records.
- Seek professional advice: When dealing with complex cross-border transactions, sellers can seek professional tax advice to reduce tax risks.
To sum up, the compliance processing of invoices and proforma invoices involved in cross-border e-commerce is the key to ensuring smooth transactions. Understanding and properly responding to customer needs can help companies stay competitive in complex international markets.