Proforma Invoice: What It Is and How to Write One
Short answer
A proforma invoice is sent before you make the supply. It is not a tax invoice, so your client cannot claim VAT from it. The tax invoice follows once you have made the supply.
What is a pro forma invoice for?
A pro forma invoice is sent before the work or delivery.
The tax invoice comes later. Section 20(1) of the VAT Act says a registered vendor making a taxable supply “must within 21 days of the date of that supply issue a tax invoice”. The tax invoice comes after the supply. The pro forma comes before it.
What is the difference between an invoice and a proforma invoice?
A proforma is sent before the supply. A tax invoice is the document you issue once you have made the supply, and the buyer can use it to claim VAT. The VAT Act does not mention proforma invoices, so the difference comes from the rules on tax invoices.
Section 16(2)(a) sets the condition for claiming input tax. It requires that “a tax invoice or debit note or credit note in relation to that supply has been provided in accordance with section 20 or 21 and is held by the vendor making that deduction”. A proforma is not that document. The table further down sets the two side by side.
Who issues a proforma invoice?
The VAT Act does not mention proforma invoices. Only a VAT vendor may issue a tax invoice or charge VAT, so a proforma from a business that is not registered has no VAT on it.
According to SARS, the VAT rate is 15%. If you are a VAT vendor and need to work out the VAT on a price, use the VAT calculator.
How do I write a proforma invoice?
You can write one yourself. Label it clearly “Pro Forma Invoice”. List the seller, the buyer, the items, the prices, the validity period and the payment terms. Send it before delivery. Do not give it a tax invoice number.
The label matters. The VAT Act says “it shall not be lawful to issue more than one tax invoice for each taxable supply”. Keep your proforma clearly separate from the tax invoice you issue later.
For the layout, use the free invoice generator or the invoice template. For quotes, use the quote maker. Change the heading and wording to suit a proforma.
Worked example: a proforma invoice for a Soweto events business
This is an example only. Thandi Nkosi runs Nkosi Events in Soweto. She is not registered for VAT, so her proforma has no VAT line.
Mahlangu Solar in Midrand asks for chairs and tables for a staff function. Thandi sends a proforma dated 3 March, valid for 7 days. It is clearly marked as not a tax invoice.
| Item | Quantity | Unit price | Amount |
|---|---|---|---|
| Chairs | 80 | R15 | R1 200 |
| Tables | 4 | R150 | R600 |
| Delivery and collection | 1 | R350 | R350 |
| Total | R2 150 |
Terms: a 50% deposit of R1 075 confirms the booking, and the balance is paid on the day. Mahlangu Solar approves the proforma and pays the R1 075 deposit. Because Nkosi Events is not a VAT vendor, it cannot issue a tax invoice and charges no VAT.
How Kwalify helps: Once your client agrees to the proforma, Kwalify sends a payment link through your own Paystack, Yoco or PayFast account. Join the waitlist
Should you pay from a proforma invoice?
Pay only if you have agreed to the order and the seller asked for payment upfront or a deposit. A proforma is not a tax invoice, so ask for the tax invoice once the supply is made.
If you are a VAT vendor, you need that tax invoice to claim input tax under section 16(2)(a). Agree the terms in writing before you pay.
What does a proforma invoice look like? A checklist you can copy
Tick off each item before you send a proforma.
- The title says it is a pro forma invoice.
- Seller name, address and contact details.
- Buyer name and address.
- Issue date and the date the proforma is valid until.
- Item descriptions, quantities and unit prices.
- Delivery or collection details and costs.
- Total in rand, with a VAT line only if you are a VAT vendor (15%).
- Payment terms and any deposit.
- Banking details or a payment link.
- A line saying that this is not a tax invoice.
| Proforma invoice | Tax invoice | |
|---|---|---|
| When it is sent | Before the supply | Within 21 days of the supply |
| Can the client claim VAT with it? | No | Yes, if the client is a VAT vendor |
| Who issues it | Not covered by the VAT Act | A VAT vendor only |
FAQ
Is a proforma invoice a legal document?
The VAT Act does not mention proforma invoices. It is not a tax invoice, so your client cannot claim VAT with it. Get legal advice if the amount is large.
What is the difference between a proforma invoice and a quote?
According to QuickBooks, a quote tells your customer what to expect before the deal is agreed. A proforma invoice typically gives full and final details once the customer has committed to the transaction. A proforma is also not a tax invoice, so your client cannot claim VAT with it.