What is a commercial invoice?
The customs document that travels with goods across a border: every field it must carry, what the Incoterm decides, and what gets a shipment held.
A commercial invoice is the document customs authorities use to decide what a shipment is, what it is worth and how much duty is owed on it. It travels with goods that cross an international border, and it is read by people who are not your customer.
It is not a different kind of bill. It is an ordinary invoice carrying extra fields that exist purely so a customs officer, who has never heard of you or your buyer, can classify and value the contents without opening the box.
When you need one
Whenever physical goods cross a border commercially — sold, sampled, replaced under warranty, or shipped between two branches of the same company. Value does not exempt you: a free replacement part still needs a declared value, because duty is charged on what the thing is worth, not on what was paid.
Services do not need one. Design work, consulting, software, anything delivered down a wire — no border is crossed by anything physical, so there is nothing to declare. An ordinary invoice is all that is required, which is why most freelancers never meet this document at all.
What it must contain
A normal invoice, plus the customs fields. The additions are the part that gets shipments held:
| Field | Why customs wants it |
|---|---|
| Full exporter and importer details | Names, addresses and tax or EORI numbers for both ends. A PO box is not an address. |
| A plain description of each item | "Cotton t-shirts, mens, short sleeve" — not "goods", "samples" or "gift". Vague descriptions are the most common reason a shipment stops. |
| HS or commodity code | The international classification that sets the duty rate. Getting it wrong is expensive; leaving it off means somebody else guesses. |
| Country of origin | Where each item was made — not where it is shipping from. This decides trade-agreement rates. |
| Quantity, unit value, total value, currency | The basis for duty. State the currency explicitly. |
| Incoterm | Who pays freight and duty. See below. |
| Reason for export | Sale, sample, repair, return, gift. Each is treated differently. |
| Weight, and number of packages | Cross-checked against the carrier's own paperwork. |
| A signature and date | A declaration that what it says is true. Many countries require it. |
The Incoterm decides who pays
Three letters on the invoice determine who is responsible for duty, tax and freight when the shipment lands. The three most common:
- EXW (Ex Works) — the buyer collects from your door and handles everything. Cheapest for you, most work for them.
- DAP (Delivered at Place) — you pay to get it there; the buyer pays import duty and tax on arrival. This is the usual default, and it is where buyers are surprised by a customs bill they did not expect.
- DDP (Delivered Duty Paid) — you pay everything including import duty. Simplest for the buyer, and the one where you can lose money if you priced it without checking the destination's duty rate.
Whichever you use, put it on the invoice. An unstated Incoterm is an argument waiting to happen the day a duty bill arrives.
Commercial invoice, proforma invoice and packing list
Three documents accompany a shipment and they are routinely confused:
| What it is for | Has values | Clears customs | |
|---|---|---|---|
| Proforma invoice | Quoting, before the sale is agreed | Yes, indicative | Sometimes accepted provisionally |
| Commercial invoice | The actual sale, for customs and payment | Yes, final | Yes — this is the one |
| Packing list | What is physically in each box | No | No, but checked against it |
More on the first of those in what is a proforma invoice.
What actually gets shipments held
- "Gift" or "sample" on a commercial shipment. It is a declaration, and an untrue one has consequences beyond delay.
- Undervaluing. Customs has reference pricing. A declared value well under the norm invites inspection, revaluation and penalties.
- A missing or wrong HS code. The shipment waits while somebody classifies it for you, at their pace.
- Country of origin left blank, or filled in with where it shipped from rather than where it was made.
- Values that disagree between the invoice, the packing list and the carrier's waybill. Any mismatch is a reason to open the box.
How many copies, and where they go
Three is the convention: one for the carrier, one for the destination customs authority, one for the buyer. Most carriers now accept an electronic upload and will tell you what they need. Put a copy in a document wallet on the outside of the parcel anyway — a shipment whose paperwork is inside a sealed box is a shipment somebody has to open.
For the ordinary invoice that sits underneath all of this, see what an invoice must contain, or make one with the free invoice generator.