One of the most important documents used in international trade is an invoice. When used in foreign trade, a commercial invoice is a customs document. Pursuant to article 23 of the Turkish Commercial Code and article 230 of Tax Procedure Law, an invoice is a document issued in exchange for sold or manufactured goods or a service. Quality, size, quantity, unit sales price, and total price of the goods that are sold should be specified on the invoice. The invoices are issued by the seller to the buyer.
You can find the common types of invoices used in foreign trade below.
- Official Invoice
An official invoice is a Ministry-stamped invoice issued by the exporter to state the price of the good or the service, to attach to the customs declaration form, or to use it as a VAT return.
An official invoice may contain; name and address of the exporter, loading point, port of discharge, country of origin of products, gross and net weight, invoice number and date, mode of transportation, intermediary bank, HTS classification number, method of payment, unit price and total price, delivery type, delivery place, the currency of invoice and signature. Since VAT is not calculated in export transactions in Turkey, VAT is not stated on the official invoice. The Official Invoice is sent to the Tax Office to which the exporter is affiliated, along with the Copy of the Customs Declaration, in the relevant period following the actual export.
- Proforma Invoice
A proforma invoice is essentially a preliminary bill of sale which outlines the exporter’s intent to deliver products or services to the importer, for a specific price. As the price hasn’t been agreed yet, the proforma invoice isn’t considered as a true invoice. If the importer agrees to the price on the proforma invoice and wants to issue an order, It is obligatory for them to declare that they accept the Proforma Invoice terms (delivery date-quantity-price option).within the period specified in the Proforma Invoice. Following this process, the proforma invoice turns into a commercial invoice.
A proforma invoice involves the information about the definition of the goods, price, quantity, mode of transportation, freight charge, insurance, date of loading, loading and discharge place, the weight of the goods, packing type, number of parcels and the expiry date of the invoice.
Proforma invoices are not a payment demand or request. However, after the invoice has been sent, if the importer issues a firm order and the letter of credit for this invoice is issued, the exporter then will be responsible for the information that they stated on the proforma Invoice. During the process, while the exporter sends the goods and the loading documents to the importer, the importer may request that the exporter send the Proforma Invoice along with the Commercial Invoice, in the letter of credit that has been issued. Thus, the importer would like to see whether the Commercial Invoice, which was actually issued during the actual export and involves the agreement with the details of the goods, is the same as the Proforma Invoice or not. It is mandatory to transfer the information given on the proforma invoice exactly to the Commercial Invoice.
- Commercial Invoice
Commercial invoices are the documents showing the sale of goods or services issued by the seller (on company letterhead) based on the proforma invoice, order, contract, or agreement. Commercial invoices are the final invoices that are taken as the basis for customs procedures, foreign exchange transfers, and commitments. If the sales conditions specified in the proforma invoice are approved by the buyer, the proforma invoice is converted into the final sales invoice upon the order given by the buyer. Commercial invoices are generally issued in English. However, some countries may request that the invoices be issued in their own language.
The original invoice is a document that authenticates the contract of sale or provides a definite indication that the sales contract exists. For import or export, the original invoice is required for customs clearance and tax calculation. The original invoice is sent to the importer by the exporter through the bank.
- Freight Invoice
Freight is the cost of transportation of the goods in the sea and/or inland waterway transportation. In CFR and CIF Delivery forms, the exporter undertakes the freight payment. In such cases, it is the invoice that is must be written "freight prepaid" on the bill of lading and must be attached to the bill of lading as well. Since this invoice is requested by the importer's bank, it is a mandatory document to be issued for these kinds of delivery methods. It must also be sent to the buyer as an export invoice attached to the bill of lading.
If the letter of credit includes the cost of freight along with the cost of the goods, the "freight prepaid” inscription must be written on the bill of lading and other shipping documents.
- Consular Invoice
The consular invoice is made out on a special form available at the embassy or consulate of the relevant country or issued as a copy of the commercial invoice, depending on the requirements of the country in question.
- Legalized Invoice
Legalized invoice, also known as consular invoice, in addition to the chamber of commerce certification, contains a signature and stamp of an embassy or consulate of the relevant country. These invoices are also known as Visaed Invoice.
- Detailed Invoice
A detailed invoice is a document that is arranged by the sender or seller when the goods are subject to ad valorem duty and come in more than one container. The detailed invoice includes the number of goods in the same type and value in each container.
If the detailed invoice does not include the information about the quantity of the goods in each container according to the sales price, the invoice must be delivered to the administration with a written statement.