What is a commercial invoice, and why is it essential for international shipments?
A commercial invoice is a crucial document in international shipments.
Put simply, it serves as a detailed record of the transaction between the buyer and the seller, providing information about the goods being shipped, their value, and other details such as the terms of sale, commodity code, and more.
Customs authorities in both the origin and destination countries use the information on the commercial invoice to assess duties, taxes, and to determine whether the shipment meets regulatory requirements.
What do I need to include in my commercial invoice?
A commercial invoice is now required for all goods leaving or entering the UK, and this document must include certain information for quick and smooth customs clearance.
You must include:
- Exporter EORI
The Exporter/Seller's EORI & VAT number (if they have one) must be clearly shown on the commercial invoice. If you do not have a UK EORI, you can register here if VAT registered or here if not VAT registered.
- Importer EORI
The Importer's (typically the buyer) EORI & VAT number (if in the EU) must be clearly shown on the invoice. Please check if the EU EORI & VAT is valid.
- Buyer Address
Buyer's full address and contact details. This must be the business address and match the address on their EORI and VAT registrations. If the goods are being delivered elsewhere, please add in another section for the delivery address.
- Sellers Address
Seller's full address & contact details This must be the business address and match the address on their EORI and VAT registrations.
- Item List
A list of all items to be exported with description and commodity codes (also called HS Codes or Tariff Codes), as well as net weights on each line of product.Please check your commodity codes.
- Country of Origin
The country where the goods were originally manufactured.
- Price & Currency
This should include any discounts or additional charges. Please ensure the actual value of the goods is used regardless of them being gifts or samples.
- Method of Payment
The method of payment used to pay for the goods.
- Invoice Information
Invoice number, date of issue and purchase order number.
- Packing Details
Number of pallets, total net weights (goods only), total gross weight (all goods + pallet), and pallet dimensions.
- Customs Procedure Code (CPC)
If you know the CPC, please show this clearly on your invoice. Otherwise, if the goods are not a final sale, please state the reason for shipping the goods. E.g. return of goods after repair, return of faulty goods, etc.
Valid incoterms from the 2010 or 2020 rules, agreed between the buyer and the seller of the goods must clearly be shown on the invoice. Please note that we can only export from the UK on DAP incoterms, and import into the UK on FCA incoterms. Please see our incoterms guide for help.
- Statment on Origin
If your goods are of UK or EU origin, the below statement must be added to your invoice. Just fill in your details where indicated in brackets. Remember, if the goods are of EU origin, please specify the country from where the goods originate. Merely stating the goods are of 'EU Origin' is not acceptable.
"The exporter of the products covered by this document (Enter exporter's EORI number) declares that, except where otherwise clearly indicated, these products are of (Enter country of origin) origin.
Name of exporter: (Name)
Place and date: (Place and date)"
Please note: The price quoted to you includes up to 10 product lines. Further lines will be charged at £5 per product line afterwards.
Take a look at our example commercial invoice for guidance.
It's also worth noting that it's important that the seller shares the commercial invoice with the receiver to avoid unnecessary confusion and delays.
How does the information on a commercial invoice differ from a standard sales receipt?
While both documents record a transaction, a commercial invoice is specifically tailored for international trade and customs clearance.
It provides more comprehensive information about the shipment, such as the commodity codes, which classify products for customs purposes, and will include additional details that a standard sales receipt would not cover.
What are the potential consequences of providing inaccurate or incomplete information on a commercial invoice?
A commercial invoice is a legal declaration. Inaccurate or incomplete information on a commercial invoice can lead to customs delays, fines, or even seizure of the shipment.
It's crucial that you ensure all details are accurate, truthful, consistent, and aligned with the regulations of the destination country.
How should the value of goods be determined and documented on a commercial invoice?
The value of goods should be determined based on the agreed-upon sale price between the buyer and seller unless the goods are a gift or sold at nominal value, then the cost price of the goods must be used.
This value needs to reflect the actual transaction value, including any additional charges like packaging or insurance.
Document this value clearly on the commercial invoice to avoid any discrepancies during customs clearance.
What are commodity codes on a commercial invoice?
Commodity Codes, also known as HS Codes or Tariff Codes, are standardised codes used to classify goods for customs purposes. They help customs authorities identify the nature of the products being shipped.
Determining the correct codes requires understanding the product's characteristics, composition, and purpose.
We recommend that you check your commodity codes before submitting your commercial invoice.
Are there specific requirements for language and currency when preparing a commercial invoice for international shipments?
Most countries require the commercial invoice to be in the language of the destination country or in a widely accepted international language like English.
Similarly, the currency used should be the currency of the transaction. Whichever currency you're expecting payment from your customer should be shown on the invoice. There is no need to convert the invoice into GBP.
This ensures clarity for customs officials and helps facilitate the clearance process.
In cases where goods are being sent as gifts or samples, how should these be documented on the commercial invoice?
When sending goods as gifts or samples, clearly indicate this on the commercial invoice. Mention "Gift" or "Sample" next to the item description, and ensure the declared value is accurate and reasonable.
Some countries have specific regulations for duty exemptions on gifts, so be aware of the destination country's guidelines.
What steps can I take to ensure that my commercial invoice complies with the customs regulations and requirements of the destination country?
To ensure compliance, you should research and understand the customs regulations of the destination country - you should consistently provide accurate and complete information on the commercial invoice.
It's advisable to work with experienced freight forwarders or customs brokers who are well-versed in international trade regulations and can guide you through the process.
Double-checking all details and maintaining open communication with your shipping partners can help prevent costly errors during customs clearance.