Overview
Commercial Invoice (CI) serves as written proof of the transaction between the buyer and the seller, recording detailed information about the goods, the transaction amount, and other necessary details. It not only plays a crucial role in goods settlement but also in customs clearance, foreign exchange settlement, tax refund, and other processes. This guide provides a detailed introduction to the definition, main functions, content requirements, types, and practical applications of Commercial Invoice in actual business.
Definition and Function
Main Functions
Transaction Documentation
Written proof of the transaction between buyer and seller, detailing quantity, price, and terms as the basis for payment and delivery.
Settlement Basis
The buyer makes payment based on the invoice content, and the bank processes foreign exchange settlement accordingly.
Customs Declaration
An important document during customs declaration; customs determines declared value and tariff rate based on invoice content.
Tax Refund Documentation
Export enterprises are required to provide commercial invoices as the basis when applying for tax refunds.
Accounting Records
Original vouchers for company accounting, serving as the basis for bookkeeping and auditing.
Content Requirements
A complete commercial invoice should include the following main contents:
Types of Commercial Invoices
Proforma Invoice (PI)
An estimated invoice provided by the seller before formal shipment, used for customs clearance, letter of credit issuance, contract signing, etc.
Final Invoice (FI)
The ultimate invoice provided after shipment of goods, serving as the basis for actual settlement.
Invoice Copy (IC)
A photocopy or duplicate of the official invoice, typically used for internal record-keeping or provided to relevant parties for reference.
Application in Actual Business
Settlement and Payment
The buyer makes payment based on the commercial invoice, and the bank handles settlement procedures accordingly. For example, a US company purchases electronic products from a Chinese supplier; the supplier issues a CI per contract, the US company pays based on it, and the bank processes settlement.
Customs Declaration and Clearance
Customs authorities determine declared value and tariff rates based on invoice content. For example, when a German company exports auto parts to the US, it must provide a CI during export declaration for tariff determination.
Tax Refund Application
Export enterprises submit commercial invoices to tax authorities as refund basis. For example, a Chinese enterprise exporting clothing to Europe submits CI documentation to apply for export tax refunds.
Accounting
Commercial invoices serve as original vouchers for bookkeeping and auditing. For example, a Japanese company receiving overseas payment performs accounting treatment based on the CI to recognize revenue.
Case Analysis
Case 1: Export of Electronic Products
Settlement: US customer opens L/C based on CI; Chinese company applies for forex settlement with L/C and CI.
Customs: Shanghai customs determines declared value and tariff rate based on CI.
Tax Refund: Chinese company submits CI to tax authorities for export tax refund.
Case 2: Clothing Import
Settlement: US company makes bank wire transfer based on CI.
Customs: New York customs determines declared value and tariff rate based on CI.
Accounting: US company recognizes import costs based on CI.
Precautions
Accurate Content
All details including goods description, quantity, price, and terms must be accurate to avoid disputes or delays caused by errors.
Format Specification
Format shall comply with international practices and regulatory requirements to ensure recognition and acceptance in international trade.
Signature and Seal
Must be signed or sealed by the seller to confirm authenticity and validity of contents.
Timely Issuance
Should be issued promptly after shipment to avoid delays in payment and customs clearance.
Retaining Copies
Seller shall retain copies as the basis for transaction records and accounting.