Doing business in Poland is one of the hottest topics today, especially for foreigners who have only recently moved to this country and dream of starting their own business. Obviously, you will have a lot of tasks to think about and accomplish. You will need to study the taxation system in Poland and understand which form of running your own business suits you best.
Another thing to consider is accounting for transactions with clients. Surely, every purchase and sale of a business should be recorded and kept in the accounting records. Based on this, you will be able to deduct taxes and pay them to the state treasury. The most common option for recording trade transactions in Poland in 2024 is the VAT invoice. However, many people do not even know about the existence of Proforma invoice, which can be very useful and beneficial in certain cases. In this article we will tell you more about what a proforma invoice is and when it should be used in practice.
Proforma invoice - what is it?
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A proforma invoice is one of the many invoices that entrepreneurs issue every day. Although it is very similar to a classic VAT invoice, it is not actually an accounting document and cannot be included in accounting.
Its use is slightly different. It is used when the entrepreneur intends to inform the buyer of the price and type of goods, products or services offered, as well as the total value of the planned order. The contractor's signature on the pro forma invoice is considered the conclusion of the contract. The reason for using a proforma invoice is also that its function of offering and providing information helps in getting paid on time.
Difference between VAT and Proforma invoice
As mentioned above, a VAT invoice is the most common option among businessmen in Poland. In simple words, it is a document confirming the purchase of goods or services by one party from another. A proforma differs from a VAT invoice primarily in its purpose.
For example, a VAT invoice is an accounting document and a form of contract binding on both parties. A pro forma invoice has only a commercial and informational function, which means that its issuance does not entail tax obligations. It is used as a form of stating the terms of cooperation - a commercial offer, which the contractor can analyze, compare with competitive offers and ultimately reject or accept.
How to make a proforma invoice?
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Now you know all the features and differences between proforma and VAT invoices. We suggest you consider how to invoice a pro forma buyer. Imagine you are a large window distributor, and you are approached by a builder for advice. They are not ready to make a deal yet and just want to see how much a large order of windows will cost them. In this case, it would be a great solution for you to put together a proforma invoice so that the client can get a closer look at the deal.
When issuing a proforma invoice, exactly the same rules apply as when issuing a regular VAT invoice. The mandatory elements are:
Date of issue and invoice number.
Names and surnames/names of the parties to the contract, along with addresses and NIP numbers.
Date of realization/completion of the supply or service,
Designation of the product, goods or service.
Units of Measurement.
Net price per unit of goods.
All discounts.
Net value of the order.
The relevant VAT rate.
The amount of VAT.
Gross sales value (expressed in total and in words).
When issuing a proforma invoice, be sure to give it an appropriate title. It should have the words «Proforma» or «Faktura pro forma» on it. Today, there are special sites on the Internet with constructors of such invoices to save businessmen time.
