If you ship your products to a country outside the EU, you will be subject to customs legislation. There is often confusion about which documents you need to include to get your package to its final destination as smoothly as possible. In this article we explain what a commercial invoice is, why you need this document and how to fill it out.
In this article, we will answer the following questions:
- What is a commercial invoice and what is it used for?
- Create your commercial invoice using our template
- What is the difference between a commercial invoice and a CN22 or CN23 form?
- Paperless Trade for shipments via DHL Express or UPS
- How do you fill in a commercial invoice?
- Commercial invoice glossary
- How do you add the commercial invoice to your shipment?
A commercial invoice is a special export document that helps your package get through customs. A properly completed and correct commercial invoice for export helps customs authorities quickly decide which taxes and import duties apply to your package. And this prevents delays.
In addition, customs officials can see whether your package meets all the requirements and they can pass on information (e.g. the recipient’s tax liability) to the country of destination. If you fill in this invoice correctly, there is a greater chance that your package will arrive on time. Packages within the EU do not require this special invoice. A list of EU countries can be found on the website of the Dutch Tax and Customs Administration. If in doubt, you can also consult the list of exceptions because some countries or territories are part of the EU but are not part of the EU customs territory.
In addition to the commercial invoice, some international shipments outside the EU also require a customs declaration (CN22 or CN23), a CP71 dispatch note, and possibly a Certificate of Origin (CO). This article will mainly discuss the commercial invoice for international shipping.
Buying internationally is getting easier, but international shipping remains a bit more difficult and filling in a commercial invoice is quite a bit of work. But we have made it a little easier with a handy template that helps you fill out this export document. This way you can be sure that your invoice meets all the current requirements and that the details have been filled in correctly. Fill in all the details of your commercial invoice and then easily download your ready-made commercial invoice in PDF format.
When sending an international package to a country outside the EU, you often need several documents. Sometimes people are confused about the difference between the commercial invoice and the CN22 and CN23 documents mentioned above. This is not surprising: both forms give customs authorities information about what goods are entering and leaving a country. However, these two forms have little to do with each other and they should not be mixed up. So what exactly is the difference? First, let’s briefly discuss what each document involves:
CN22 and CN23
A CN22 or CN23 form is a mandatory customs form that must be added to shipments outside the EU. The form is mainly used for shipments that are transported by a postal company. The value or weight of the shipment determines whether you use form CN22 or CN23. The form contains information about the goods being transported and this information is used to determine whether tax must be paid. A CN23 form is always accompanied by a CP71 dispatch note.
The commercial invoice
The commercial invoice is also an export document that you add to all commercial shipments outside the EU. It is a binding customs document that mainly contains information about the contents of the package and the agreements made (Incoterms), such as who pays the customs costs. Based on the commercial invoice, the customs authorities determine whether import duties have to be paid on the goods.
A CN22 or CN23 document requires you to fill in a bit more information than the commercial invoice, but the idea behind it is the same. Both documents provide information about the contents of the package so that customs authorities can decide whether the parcel can enter the country, and who is responsible for which taxes and import duties.
So when do you use a CN22 or CN23 form, and when do you use a commercial invoice?
- If you are sending a package to a country outside the EU and using a postal service like PostNL (in the Netherlands) or Royal Mail (in the UK), use the CN22 or CN23 customs form. The CN22 or CN23 document is used by the Universal Postal Union and is therefore mandatory for postal services. You must also add a commercial invoice to this kind of shipment.
- If you are using a carrier such as DHL or DPD instead of a postal service, you do not need to add a CN22 or CN23 form.
The main difference is that a commercial invoice is always required for all e-commerce shipments, and only parcels sent via postal services need the additional CN22 or CN23 document.
However, to avoid delays, we recommend that you always add both documents.
When you ship via DHL Express or UPS, you can use ‘Paperless Trade’. This means that customs forms are sent to the carrier electronically. As soon as you process your international order, the customs forms are immediately forwarded. This not only saves you time, printing and costs, but it also reduces the risk of documents being lost. Sendcloud automatically uses Paperless Trade when you ship outside the EU using DHL Express or UPS.
What has to be on a commercial invoice? Although there is no standard format, the document must contain several fixed elements, such as details about the parties involved in the shipment and information about the goods. Below you will find the most difficult parts of the commercial invoice, and below that you will find an explanatory glossary.
Please note: A commercial invoice must always be in English.
What are you shipping: description of the article, number, weight and value
It may seem obvious, but describing the contents of the package is an important part of the commercial invoice. This gives customs authorities a clear overview of what you are shipping. The description must explain exactly what you are sending, what the article is made of and, if applicable, what its purpose is. Do this for each item separately. Customs packages are often scanned, and you may be fined if the description does not match the contents of the package. Therefore, it is very important to do this accurately.
Also state the number of items, the total weight and the total value in euros of the contents of your package. It is important that you determine the value accurately. Even a sample, gift or return shipment has a value.
HS code or commodity code
Every item in your package must have an HS code or commodity code. The Harmonized System (HS codes) classifies goods so that customs authorities know which taxes, excise duties and controls apply. It is important that you enter the correct code as it determines the amount of import duties or other taxes you must pay. Looking up the code can be difficult, but there are a number of ways to find your product’s code.
The manufacturer of your product often knows its HS code. If you don’t have this information, you can look up the code yourself. To do this, go to trade tariffs on the customs administration website and click on the ‘Nomenclature’ tab. There you will find all the commodity codes. Do you need more help? Then read the manual on looking up commodity codes. Finally, you can contact the tax and customs agency in your country for more information.
Country of origin
In the ‘country of origin’ field, you state where your goods were produced. In some cases you will need a CO document as an additional document. Some countries outside the EU request this document for trade policy measures.
The Incoterms (or terms of sale)
The International Commercial Terms or ‘Incoterms’ are standardised international agreements on the transport of goods. The Incoterms clarify:
- Who is responsible for the shipping, insurance, import and customs costs of the shipment;
- Who takes care of the transport and to where;
- Who is responsible for the goods at each phase of the shipment, including the point at which the risk and costs of delivery transfer from the seller to the buyer.
Please note that the carrier you have chosen also supports these Incoterms.
The Incoterms are updated every ten years and so have just been updated for 2020. The 2010 Incoterms remain in force, but more and more companies will be switching to the 2020 Incoterms. Read our update about the 2020 Incoterms here. The most common Incoterms are EWX (Ex Works), FOB (Free on Board), CFR (Cost & Freight), DAP (Delivered At Place) and DDP (Delivered Duty Paid). If you don’t know which Incoterm is best for you, we recommend you choose DAP. This means that you as the seller pay the shipping costs, arrange the insurance and prepare the export documents. The recipient pays any import and customs duties.
We already mentioned that commercial invoices are always written in English. If you want to create your commercial invoice yourself or are using a template and don’t know what to fill in, you will find a description of the most common terms here:
- From: This is you, the person sending the package.
- To: The name and address of the person or company you are sending the package to.
- Intermediate Consignee: If you are sending the package to an intermediary, fill in the details of that person or company here.
- Date: The date you sent the package.
- Invoice Number: Your own invoice number.
- Customer PO No: Reference or order number of your sale.
- Currency Used: The currency you used when filling in the document.
- Country of Origin: The country where your product comes from. In some cases, you must add a CO document.
- Reason for export: Tick everything that is applicable.
- B/L/AWB No: This refers to the transport document setting out the arrangements with the carrier. The carrier is often responsible for preparing this document.
- Final Destination: The final destination of your package.
- Export Route/Carrier: The shipping company you are working with or the route your package will take.
- Terms of Sale: Better known as the Incoterms.
- Terms of Payment: The payment terms between you and the seller (e.g. payment within 30 days of receipt, direct deposit).
- Terms of Freight: Freight conditions (e.g. prepaid, collect). You can also enter these terms and conditions in the Terms of Sale or the Incoterms.
- No. of Packages: The number of packages you are sending.
- Comments: Space for shipping or delivery instructions or other notes.
- Contents: A description of the articles you are sending.
- HS Code: The HS code or commodity code.
- Value: Price per product.
- Net Quantity: Total number of products.
- Weight KG: Total weight of the package.
- Freight: If applicable, report the shipping costs here.
- Insurance: If applicable, report the insurance costs here.
- Date and signature: Your name, signature and date. It may seem obvious, but your package will probably not be sent without your signature. So make sure to sign and date all your packages.
Normally you need to add three copies of the commercial invoice: one for the country you are exporting from, one for the country you are shipping to and one for the recipient. Put two of them in a packing list envelope on the outside of the package and put the last commercial invoice inside the package for the recipient.
Also make sure that your package meets these other requirements:
- The box in which you send the package must be sturdy enough to withstand a fall of 1.5 metres.
- The package must be filled with padding material. Due to censorship rules, you may not use newspapers for this purpose.
- The corners of the box must be reinforced with tape.
It is important that you always keep a copy of the commercial invoice and any CN22 or CN23 documents. If mistakes are made in the handling of the shipment, you can sometimes face high customs fees. Be prepared for anything and keep a copy.
Do you want to know everything about international shipments? Then download our free white paper on international shipping.