What is Commercial Invoice?
Primarily used in international trade, a commercial invoice is a customs document issued by the selling party as a declaration to U.S. Customs and Border Protection (CBP).
What is a commercial invoice used for?
A commercial invoice is used to calculate duties, tariffs, and taxes. Since some countries like the United States do not impose a duty on transportation costs, it is important that the commercial invoice shows a breakdown of transportation charges or other services for which a buyer pays a seller.
What is included in a commercial invoice?
A commercial invoice includes information regarding the involved parties (seller, buyer, exporter, and manufacturer), the description, quantity, and the price of goods being sold. It also includes the currency of the price, country of manufacture, and the Harmonized Tariff Schedule codes for the goods, which is a 10-digit import classification system specifically implemented in the United States by the International Trade Commission (ITC).
A commercial invoice often includes a signed and stamped statement, certifying that the invoice is true. In the United States, however, the latter is not required nor considered valid certification, as signatures have largely replaced ink stamps.
The commercial invoice should also always clarify the trade terms or incoterms that apply to the sale of goods. They are as follows:
EXW - Otherwise known as “ex-works,” EXW is an international trade term, describing when a seller makes a product available at a designated location, and the buyer of the product must cover the transport costs.
FOB - “Free on Board” is a term used to indicate if the seller or the buyer is liable for goods that are damaged or destroyed during the shipping process.
CIF - “Cost, Insurance, Freight” is a term used to describe an expense paid by a seller to cover costs, insurance, and freight in the case of a loss or damage to buyer’s order, while it is in transit to export port named in the sales contract.
Are there any specific requirements on commercial invoices?
Many Middle Eastern countries have specific requirements for commercial documents and invoices. They often require documents to be notarized, authenticated by the origin state, stamped by the Chamber of Commerce, and legalized by the destination country’s consulates.