Proforma Invoice Correct For Free

Proforma Invoice Meaning. A proforma invoice, commercial invoice compared, means an invoice which is made before the sale has actually taken place. When distinguishing a proforma or performa invoice an understanding of latin may be of use: pro generally means before, while per generally means after the fact.

4. pro 02c8forma (-a) (also with hyphen, and as one word), for form's sake; as a matter of form; in the way of formality.

As a pro forma invoice does not act as an official tax invoice in the eyes of the tax office, it negates any obligation to report the transaction for either GST or income tax purposes until the issuer is certain of the goods being delivered and paid for.

Pro forma, a Latin term that means for the sake of form or as a matter of form, is a method of calculating financial results using certain projections or presumptions.

Apart from an invoice number and the words 'proforma invoice', a proforma invoice looks very similar to a regular invoice.Like a regular invoice, proforma invoices should include contact details, a date of issue, a description of the goods or services provided, the total amount due, and any VAT.

Whilst a pro forma invoice may be capable of meeting the requirements to be a tax invoice, they are unlikely to meet the GST Act definition of an invoice. Therefore, a pro forma invoice, by itself, would generally be insufficient to trigger attribution for GST credits claimable on the supply.

According to HMRC, proforma invoices aren't considered to be commercial invoices or VAT invoices. As they aren't considered to be VAT invoices, you can't reclaim VAT using any proforma invoices that you've been sent by a supplier; instead you need a full, finalised invoice.