Proforma Invoice: Definition, Use Cases and Sample
In short
A proforma invoice is a non-binding document that looks like an invoice but has no VAT effect. It is mainly used for advance payments, customs clearance, and as a supplement to quotes. A proforma invoice creates no tax liability and no right to input-tax deduction under the German VAT Act (UStG).
At first glance a proforma invoice looks just like a regular invoice, but it serves a completely different legal purpose. It does not trigger a payment obligation in the classic sense, is not an invoice under VAT law, and does not entitle the recipient to deduct input tax. This guide explains exactly what a proforma invoice is, when it makes sense to use one, and what details it should contain.
What is a proforma invoice?
The term comes from the Latin "pro forma" – meaning "for the sake of form". A proforma invoice is a formal document stating the value of a delivery or service without asserting an actual claim for payment. It informs the recipient about the type, quantity, and value of the goods or service, but does not legally demand payment.
The key point: a proforma invoice is not an invoice within the meaning of § 14 UStG. This has two important consequences:
- It creates no VAT liability for the issuer.
- It creates no right to input-tax deduction for the recipient.
The actual, tax-relevant invoice is issued later – usually after payment or delivery.
When is a proforma invoice used?
There are three typical use cases in which a proforma invoice has proven useful in everyday business.
1. Requesting an advance payment
If you want a new customer to pay in advance before you ship goods or provide a service, the proforma invoice is a common tool. It states the amount due and your bank details without already entering a tax-binding invoice in your books. Only after the payment arrives do you issue the proper invoice.
2. Customs and export
In international trade, customs authorities often require a proforma invoice to determine the value of goods for clearance – for example for samples, gifts, repair returns, or free replacement deliveries where no real payment is made. Here the proforma invoice serves purely as proof of value for customs handling.
3. Supplement to quotes
Some companies send a proforma invoice as a more binding form of a quote or cost estimate. The customer sees the final total including the stated tax rates, can obtain internal approvals, and prepare payment – all without an actual claim arising yet.
Proforma invoice vs. real invoice
The most important difference lies in the VAT effect. A proper invoice under § 14 UStG is the basis for the input-tax deduction and triggers the issuer's VAT liability. The proforma invoice does neither.
| Feature | Proforma invoice | Invoice (§ 14 UStG) |
|---|---|---|
| VAT liability for issuer | no | yes |
| Input-tax deduction for recipient | no | yes |
| Payment obligation | informational | legally binding |
| Sequential invoice number required | no | yes |
| Typical purpose | advance payment, customs, quote | billing for the service |
Important: do not use a sequential invoice number from your regular number range for a proforma invoice. The requirement of sequential, unique numbering applies only to real invoices. Also clearly and visibly mark the document as a "Proforma Invoice" so it is not accidentally booked or used for input-tax deduction.
What details belong on a proforma invoice?
Unlike a real invoice, there are no legally mandatory fields for a proforma invoice. In practice, however, it has proven useful to structure it similarly so it is meaningful – especially for customs purposes. The following details should be included:
- Clearly visible label as "Proforma Invoice"
- Full name and address of the issuer
- Full name and address of the recipient
- Date of issue
- Description of the goods or service with quantity
- Unit prices and total value (net)
- Applied tax rate (19 %, 7 % or tax-free) and tax amount for information
- Gross amount
- Bank details, if an advance payment is requested
- For exports: country of origin, customs tariff number, delivery terms (Incoterms)
Include the note on tax rates and the tax amount for information only. It has no VAT effect as long as the document is clearly marked as a proforma invoice.
A worked example
A mechanical engineering company delivers a spare part to a new customer and wants to be paid in advance. The part costs 2.000,00 € net, and the standard tax rate of 19 % applies.
- Net amount: 2.000,00 €
- VAT 19 %: 2.000,00 € × 0,19 = 380,00 €
- Gross amount: 2.000,00 € × 1,19 = 2.380,00 €
The company creates a proforma invoice for 2.380,00 € with the informational note on the 19 % VAT and the bank details. The customer transfers the amount. Only after the payment arrives does the company issue the proper invoice with a sequential invoice number and all mandatory fields under § 14 UStG. This real invoice then entitles the customer to deduct 380,00 € input tax.
For quick conversion between net and gross, you can use our VAT calculator – and you can then create the finished, § 14-compliant invoice with our invoice generator in just a few minutes.
Small businesses and the proforma invoice
Small businesses under § 19 UStG do not show VAT. On a proforma invoice you therefore list no tax rate, only the net amount, which is also the total. The later real invoice must carry the note "Gemäß § 19 UStG wird keine Umsatzsteuer berechnet." (No VAT is charged in accordance with § 19 UStG.) Note: since 2025 the small-business scheme applies if your prior-year turnover was no more than 25.000 € and your current-year turnover stays at or below 100.000 €.
Proforma invoice and the e-invoice
Since 01.01.2025 every domestic business must be able to receive structured B2B e-invoices (formats compliant with EN 16931 such as XRechnung or ZUGFeRD). The obligation to issue structured e-invoices applies with transition periods: until 31.12.2026 paper or PDF is still allowed with the recipient's consent, and for businesses with prior-year turnover up to 800.000 € even until 31.12.2027. From 01.01.2028 the e-invoice is fully mandatory in the B2B sector. Important: these rules apply only to the real, tax-relevant invoice. A proforma invoice is not a VAT invoice and therefore does not fall under the e-invoice obligation. The later proper invoice, however, must be stored unalterably in line with GoBD – the retention period for invoices has been eight years since 2025.
Avoiding common mistakes
A few pitfalls come up again and again:
- Booking a proforma invoice like a real invoice: A proforma invoice must not be booked for VAT purposes, neither by the issuer nor the recipient.
- Assigning a sequential invoice number: This dilutes your regular number range and can lead to gaps or confusion.
- Forgetting the follow-up invoice: After payment or delivery, the proper invoice must follow – only it is tax-effective and triggers the input-tax deduction.
- Missing label: Without the clear note "Proforma Invoice", the tax office may treat the document as a real invoice – in which case you might owe the VAT shown on it.
If you keep these points in mind, you use the proforma invoice for what it is: a flexible, non-binding tool for advance payments, customs, and quotes. The legally compliant billing then follows with a proper invoice – easiest of all directly with our invoice generator.
Frequently asked questions
Is a proforma invoice a real invoice?
No. A proforma invoice is not an invoice within the meaning of § 14 UStG. It creates no VAT liability for the issuer and does not entitle the recipient to deduct input tax. It serves informational purposes only.
Can I deduct input tax from a proforma invoice?
No. Since the proforma invoice is not an invoice under § 14 UStG, it does not entitle you to deduct input tax. Only the proper invoice with all mandatory fields enables the input-tax deduction.
Does a proforma invoice need a sequential invoice number?
No. The requirement of a sequential, unique invoice number applies only to real invoices under § 14 UStG. For a proforma invoice you should not use a number from your regular invoice range.
When is a proforma invoice used?
Typical occasions are requesting an advance payment before delivery, providing proof of value for customs clearance in exports, and serving as a more binding form of a quote or cost estimate.
Do I have to show VAT on a proforma invoice?
You may state the tax rate and tax amount for information, for example to show the customer the total. These details have no VAT effect as long as the document is clearly marked as a proforma invoice. Small businesses under § 19 UStG do not show VAT.
Does a proforma invoice fall under the e-invoice obligation?
No. The B2B e-invoice obligation in force since 2025 applies only to real, tax-relevant invoices under § 14 UStG. A proforma invoice is not such an invoice and is not subject to the obligation. The later proper invoice, however, may need to be a structured e-invoice.
What happens after a proforma invoice?
After payment arrives or delivery is made, you issue the proper invoice with a sequential invoice number and all mandatory fields under § 14 UStG. Only this real invoice is tax-effective and entitles the recipient to deduct input tax.
How do I quickly create a proforma invoice?
The easiest approach is to structure it like a normal invoice and clearly mark it as a proforma invoice. With our invoice generator you can create the document free of charge and without signing up in just a few minutes.