Proforma Invoice vs Tax Invoice
What a proforma invoice is, why it isn't a tax invoice under UAE VAT, and when to send each one.
The short answer
A proforma invoice is a preview of a sale: it tells the buyer what they will be charged before anything is supplied. A tax invoice is issued once the supply happens, and it is the document UAE VAT law relies on. Your customer can't recover VAT using a proforma invoice, and you don't report it in your VAT return.
What a proforma invoice is for
- Giving a firm price so the buyer can approve a purchase or raise a purchase order.
- Asking for an advance payment or deposit before you start work.
- Helping a buyer open a letter of credit or arrange import paperwork.
- Showing customs or a bank the expected value of a shipment.
Side by side
| Proforma invoice | Tax invoice | |
|---|---|---|
| Purpose | A quote or advance bill before the sale is final | The legal record of a taxable supply |
| When it is sent | Before the goods or services are supplied | Within 14 days of the date of supply |
| Legally binding | No, it is an offer or request for payment | Yes, it records what was supplied and the VAT due |
| Customer can recover VAT with it | No | Yes, if the customer is VAT-registered |
| Recorded in your VAT return | No | Yes |
| Title on the document | "Proforma Invoice" | "Tax Invoice" |
Advance payments change the timing
Under UAE VAT, receiving a payment can trigger the date of supply for the amount paid. So if a customer pays a deposit against your proforma invoice and you are VAT-registered, you will usually need to issue a tax invoice for that payment and account for VAT on it. Check the FTA's guidance on the date of supply for your situation.
What to put on a proforma invoice
- The title "Proforma Invoice", so nobody mistakes it for a tax invoice.
- Your business details and the customer's details.
- A reference number and date, plus how long the prices are valid.
- A description, quantity and price for each item, and the expected VAT.
- Payment terms, delivery terms and bank details if you are asking for a deposit.
Don't number proforma invoices in the same sequence as your tax invoices. Keeping them separate avoids gaps in your tax invoice numbering. Our guide to invoice numbering explains why that matters.
When to switch to a tax invoice
Issue a tax invoice once the goods are delivered, the service is done, or payment is received, whichever comes first, and within 14 days of that date. If you are VAT-registered it needs the full set of tax invoice details listed in our UAE VAT invoice guide. In the invoice generator you can pick "Pro Forma Invoice" or "Tax Invoice" as the document title.
Official sources and review date
Last reviewed: . This is general information, not tax advice.