Tax invoices and proforma invoices look similar but are used at different stages. One is for a completed sale and tax compliance; the other is a pre-sale quote. Here’s a short guide to what each is and when to use it.
A tax invoice (called GST invoice or VAT invoice in some countries) is the official bill you issue after you’ve sold goods or provided services. It lets you charge tax, lets the buyer claim input tax credit where allowed, and is what you use for your tax returns. Rules and names differ by country, so check what your jurisdiction requires.
A proforma invoice is a pre-sale document you send before you supply anything. It works like a quote in invoice format: it shows the customer what to expect and how much it will cost. No supply has happened yet, so no tax is charged and you don’t report it on tax returns. It’s often used for budgeting, approvals, or import/export (e.g. letters of credit, customs).
Tax invoice: Unique number and date; your and buyer’s name, address, and tax ID; description of goods/services; quantity, price, taxable value; tax rate and amount; total; signature if required. Requirements vary by country (e.g. place of supply, product codes like HSN/SAC).
Proforma invoice: Heading “Proforma Invoice”; your and customer’s details; proforma number and date; description of what you’ll supply; quantities and amounts (add “Estimate only” or “Subject to change”); no tax; validity period (e.g. “Valid for 30 days”); brief terms.
✅ Tip: EasyGoInvoice helps you create both, with fields you can adjust for your country’s rules.
| Aspect | Tax Invoice | Proforma Invoice |
|---|---|---|
| When used | After goods or services are supplied | Before supply (quoting stage) |
| Legal / tax | Required for compliance; reported in returns | Not a tax document; not reported |
| Tax charged? | Yes (GST, VAT, or sales tax) | No |
| Input tax credit | Buyer can claim where allowed | Not applicable |
| Binding for payment? | Yes | No; it’s an estimate until you issue a tax invoice |
In practice: Client asks for a quote → send a proforma invoice. They confirm, you deliver → issue a tax invoice and report it in your returns.
| Situation | Use this |
|---|---|
| Quote or estimate before any supply | Proforma Invoice |
| Sale completed; you need to bill and pay tax | Tax Invoice |
| Buyer needs to claim input tax | Tax Invoice |
| Export: document for LC or customs before shipment | Proforma Invoice |
Create both with EasyGoInvoice. No signup required to get started.
This post is for informational purposes only and is not legal or tax advice. Rules differ by country and can change. Always check with a qualified accountant or tax advisor for your situation and location.
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