You have registered as an exporter, or you have finally managed to create your limited company and start your own company. Do you know what the most common operation that you will have to do day after day is? Make invoices.
It doesn’t matter if you create them in Excel, in Word, in a billing program, or by hand. You will have to create invoices daily. In fact, the more you bill, the better. Good sign!
A commercial invoice is a document attesting to the sale of goods between an importer and an exporter. The commercial invoice is used in particular to calculate the customs duties to be paid during export or an import.
The commercial invoice is sometimes also called a customs invoice. It only concerns companies that export goods abroad, outside the European Union.
And how is an invoice made? When do I have to include VAT? And retention? Well, it is quite easy, and in this article, we will teach you how to make a commercial invoice, whatever the type. We offer free templates of a commercial invoice to do all this in much less time.
The commercial invoice is intended for customs. It is necessary for the progress of the customs clearance procedure. Like parfoma invoice, it also deals with the sales but it also includes exports and imports.
The role of a commercial invoice is mainly to prove the sale between the exporter and the importer.
The commercial invoice contains important information about the exported goods, such as the customs value, and in particular, it allows the calculation of customs duties and other taxes to be paid once the goods arrive at their destination.
It is issued by the company that exports goods abroad. The commercial invoice is sent to the importer, generally in triplicate.
How to make a commercial invoice?
There are no obligations as to the language in which the commercial invoice must be drawn up. However, it may be wise to prepare this invoice in English to facilitate the customs clearance procedure.
There is no standardized format for the commercial invoice, just mandatory information.
Mandatory details of the commercial invoice
The mandatory information that must appear on the commercial invoice is as follows:
- Data of the issuer of the invoice; your names and surnames, address, and NIF or CIF. You can also add a contact phone or an email if you prefer.
- Serial number: serial number of the invoice series. They must be ordered from 1 (first invoice of the fiscal year) onwards during that fiscal year.
- Date: day of issue of the invoice.
- Data of the sender of the invoice: name and surname, address, and NIF or CIF of the person who receives the invoice. You can add other data in case it seems necessary (phone, mail…).
- Concept: description of the invoice. You must write the reason (product or service) for which you issue that specific invoice. For example, something like “Online Marketing Services in October” would do.
- Tax base: the amount of the invoice before taxes (personal income tax and VAT if necessary).
- Personal income tax withholding (optional): withholding for professional freelancers that varies in amount depending on the withholding you have (7% or 15%).
- VAT (optional): the amount of Value Added Tax that you must collect on the invoice. In most invoices, you will issue a 21% unless the VAT rate of your product is hyper reduced, reduced, or exempt.
- Total amount: the sum of the tax base – IRPF + VAT if both elements have been included.
- Payment method: means by which you will receive the collection of the invoice in question (the most common is through the bank account).
These 10 items are the most common on all invoices. Now we will see how the most complicated ones are filled out, which are none other than the personal income tax, VAT, and total amount.
How to calculate VAT
The second tax to calculate is VAT. You can see the different types of VAT, I leave them here to give you an idea:
- Super-reduced VAT (4%): for bread, milk, fruits, cereals, cheeses, books, non-advertising newspapers and magazines, medicines, wheelchairs, prosthetics, and VPO.
- Reduced VAT (10%): food in general, transport, plants, amateur sports shows, …
- General VAT (21%): applies to almost all products and services, except those included in the super-reduced or reduced VAT. The most common is that you have to create invoices in this type of VAT.
- VAT Exempt (0%): it is very rare that you have to issue a VAT-exempt invoice unless it is an export.
(Mentioned rates were updated on 06-01-20)
You can check the different types of VTA across Europe over here in detail.
How to calculate the total amount
The total amount of the invoice is calculated depending on whether you have had to include VAT and Personal Income Tax on your invoice. Therefore, 3 different cases could happen to you:
Invoice without VAT without IRPF withholding: it is very rare, but in this invoice, the total amount would be equal to the tax base.
VAT invoice without IRPF withholding: the total amount would be a Taxable base + 21% of the taxable base (or 10% or 4% if applicable).
Invoice with VAT and withholding of personal income tax: the total amount would be as follows -> Tax base + VAT (21% / 10% / 4% x tax base) – Income tax withholding (7% / 15% x tax base).
It is not difficult, right? We have a ready to use commercial invoice which you can use without getting into much trouble.