What is a commercial invoice?
A commercial invoice is the invoice issued for a completed sale, and for international shipments it is the document customs uses to assess duty and tax.
Domestically it is simply an invoice. In export it takes on a second role — it becomes the legal declaration of what is being shipped, what it is worth and where it came from. Errors on it delay goods at the border.
Why customs cares about it
Customs authorities use the commercial invoice to answer three questions: what are these goods, what are they worth, and where were they made. Those determine the duty rate, the tax charged and whether any restrictions apply.
Because it is a declaration, understating value is not a shortcut — it is a customs offence, and it also voids most shipping insurance, which is calculated on declared value.
What must appear on it
- Seller (exporter) — name, address, tax and registration numbers.
- Buyer (importer) — name, address, tax number.
- Consignee, if different from the buyer.
- Invoice number and date.
- Full goods description — plain language, specific. “Electronic parts” will be queried; “12V DC cooling fans, 120mm, plastic housing” will not.
- HS commodity codes where known.
- Quantity, unit and unit price.
- Total value and currency.
- Country of origin — where goods were manufactured, not where they shipped from.
- Incoterms — EXW, FOB, CIF and so on, which define who pays freight and carries risk.
- Weight, gross and net.
- Reason for export — sale, sample, repair, gift.
Description quality decides clearance speed
The most common cause of customs delay is a vague description. An officer cannot classify “machine parts”, so the shipment is held pending clarification, which takes days.
Write descriptions as though explaining to someone who cannot see the goods: what it is, what it is made of, and what it is used for. Add the HS code where you know it — that removes the classification question entirely.
Country of origin is not country of shipment
Origin means where the goods were manufactured or substantially transformed. Goods made in China, warehoused in Dubai and shipped to Nigeria have Chinese origin, not Emirati.
This matters because trade agreements and preferential duty rates depend on origin. Declaring it wrongly can mean paying duty you did not owe — or owing duty you did not pay, which is the more expensive error.
Commercial versus proforma
The proforma comes first and states what will be charged so the buyer can arrange payment or permits. The commercial invoice comes at shipment, demands payment, and serves as the customs declaration.
Both may be needed on the same transaction, and the commercial invoice should reference the proforma number so the pair is traceable.
Frequently asked questions
What is a commercial invoice used for?
It requests payment for a completed sale and, in international trade, serves as the customs declaration used to assess duty, tax and admissibility.
What is the difference between a commercial invoice and a proforma invoice?
A proforma is issued before delivery to confirm what will be charged and is not a tax document. A commercial invoice is issued at or after shipment, demands payment, and is what customs uses.
What happens if the description is too vague?
Customs cannot classify the goods and holds the shipment pending clarification, which typically costs days. Specific descriptions with HS codes clear fastest.
Does country of origin mean where it shipped from?
No — it means where the goods were manufactured or substantially transformed. Goods made in China and shipped from Dubai have Chinese origin, and getting this wrong affects duty rates.
Can I declare a lower value to reduce duty?
No. Under-declaration is a customs offence, and it also voids most shipping insurance since cover is based on declared value.
Do I need Incoterms on a commercial invoice?
You should include them. They define who pays freight and insurance and where risk transfers, which prevents disputes when something goes wrong in transit.