Last updated November 6, 2026
Rules and figures from other sources checked on November 6, 2026. They change, so confirm with the source before you rely on them.
General information, not tax or legal advice. The rules depend on your country and your situation, so check anything with a tax or legal consequence with your accountant.
A commercial invoice is a customs document that travels with exported goods, so officials can value and classify them. A tax invoice, called a VAT invoice in the EU and UK, records a sale for tax and supports a registered customer's VAT reclaim. A single export often needs both, and sales of services only ever need the second.
"Tax invoice" is the everyday term in many countries that charge GST, such as Australia and India. In the EU and UK, the equivalent is the VAT invoice, so read the two as the same thing here.
What is the difference between a commercial invoice and a tax invoice?
The difference between a commercial invoice and a tax invoice is who reads it and why: customs needs the first to clear goods, and tax authorities and your customer's accountant need the second.
| Commercial invoice | Tax or VAT invoice | |
|---|---|---|
| Job | Clears goods through customs | Records the sale for tax |
| Read by | Customs, freight forwarders, the buyer's broker | Tax authorities, the customer's accounts team |
| Covers | Physical goods crossing a customs border | Goods and services alike |
| Details that matter | HS code, origin, weights, Incoterms, freight and insurance | Sequential number, VAT numbers, VAT rate and amount |
| Rules set by | Export and destination country customs | Article 226 in the EU, Notice 700/21 in the UK |
| Where it goes | Travels with the goods | To the customer, and into your records |
The practical consequence is that customs uses the commercial invoice to work out duty. The UK government's export guidance says the information determines the duty rates payable and whether restrictions apply.
When do you need each invoice?
You need a commercial invoice when goods cross a customs border, and a tax invoice for almost any business sale made by a VAT-registered seller. This table assumes you are selling to a business.
| Sale | Tax or VAT invoice | Commercial invoice |
|---|---|---|
| Services, to any country | Yes | No |
| Goods within your own country | Yes | No |
| Goods between EU countries | Yes, with the exemption reference | No, there is no customs border |
| Goods from the EU to the UK, US or elsewhere | Yes, showing the export exemption | Yes |
| Goods from Great Britain to the EU | As UK rules require for a zero-rated export | Yes |
| Samples or gifts, with no sale | Often no sale to invoice. Ask your accountant | Yes, at market value |
Goods between EU countries have one trap. Some territories, including the Canary Islands, Ceuta and Melilla, fall outside the EU VAT rules, so a shipment there can need customs paperwork even though the destination is part of Spain. Ask your forwarder.
What must a commercial invoice include?
A commercial invoice must include enough for customs to identify the goods, value them and classify them. No single worldwide format exists, and the destination country decides. The UK government's export guidance gives a good general list:
- Invoice number and issue date
- Seller and buyer names, addresses and contact details, plus the final recipient if different
- The related proforma invoice, purchase order or contract
- Unit price, currency, payment method, and any discounts or extra charges
- Quantity, gross and net weights, and the number and type of packages
- The Harmonised System (HS) code and a plain description of the product
- The Incoterms agreed with the buyer
- Marks and numbers on the packaging
- Country of origin, with any declaration wording the market requires
- Means of transport and route
- Total value, with freight, insurance and certification costs shown
Some countries add requirements. US customs, for example, sets out required contents in 19 CFR 141.86, including the port of entry and itemised charges for freight, insurance and packing. The same UK guidance warns that some destinations want a second language version, or an invoice certified by a Chamber of Commerce or embassy.
GOV.UK's export steps add three rules worth following anywhere. The completed invoice has to travel with the goods. The value is the price you are selling for, or the market value if you aren't selling. Freight and export insurance included in the price are listed separately.
A worked example: one export, two documents
Here's an invented example. A ceramics maker in Portugal sells 200 mugs to a shop in the US at €9.00 each, and agrees to pay freight and insurance as part of the deal.
| Item | VAT invoice | Commercial invoice |
|---|---|---|
| Goods | 200 mugs at €9.00: €1,800.00 | Same figures, plus HS code 6912.00 (ceramic tableware) and origin: Portugal |
| Freight | €240.00 | €240.00, listed separately |
| Insurance | €36.00 | €36.00, listed separately |
| VAT | €0.00, with the export exemption reference | Not applicable |
| Total | €2,076.00 | €2,076.00 |
| Number and dates | Sequential invoice number and issue date | Same, or its own reference |
| Other details | Seller's VAT number | Gross and net weight, 6 cartons, Incoterm, route |
The figures should match to the cent, because a difference between the two documents is something you would have to explain to customs or to a tax inspector. The exemption comes from Article 146 of the VAT Directive, and the seller keeps proof that the goods left the EU, such as a transport document or customs record.
Can one document be both a commercial invoice and a tax invoice?
One document can be both a commercial invoice and a tax invoice if it carries every required detail of each. Nothing in Article 226 stops you adding customs details, because the European Commission says businesses may always include extra information. The risk runs the other way: a customs-focused document often lacks a sequential number or the seller's VAT number, and then it fails as a VAT invoice.
Keeping two documents is often simpler, because the VAT invoice stays clean in its numbered sequence and the customs document can carry weights, marks and routes. Whichever you choose, ask your freight forwarder first, since they see what the destination's customs accepts.
Export invoices and customs paperwork in ERPFlow
ERPFlow issues the tax side of this: an invoice with a sequential number, both parties' VAT numbers and a tax rate per line, including exempt and zero-rated types set at 0%. It doesn't produce a commercial invoice, packing list or any customs document, and there are no fields for HS codes, country of origin, weights or Incoterms.
- If one document will do, you can type the HS code and origin into each line description, and the Incoterm and shipment details into Notes, which print on the PDF. Check it with your forwarder.
- If you need a separate commercial invoice, produce it elsewhere and attach it to the invoice as a file, along with transport documents and customs records, so your export evidence stays with the sale.
- The exemption reference goes in Notes, since ERPFlow doesn't word it for you.
If shipping goods is your daily work, the page on wholesale and distribution shows what else ERPFlow covers for that trade.