What Is a Pro Forma Invoice? (Does It Need GST in NZ?)
A pro forma invoice is a provisional invoice a supplier issues before a sale is finalised, setting out exactly what the buyer will be charged so they can raise a purchase order, arrange payment or clear an import. On the GST question: no — a pro forma invoice is not taxable supply information, so your customer cannot claim GST on it and you do not account for GST on it. The real tax invoice comes after.
What a Pro Forma Invoice Is
“Pro forma” means “as a matter of form.” It looks like an invoice — line items, quantities, prices, GST shown, payment details, a total — but it documents a sale that has not happened yet. Nothing has been supplied, no debt exists, and the figures can still change.
That distinction matters because it is the difference between a commitment and a record. A quote invites the buyer to agree. A pro forma invoice assumes they have agreed in principle and shows them precisely what the paperwork will say, usually so they can get it approved or funded internally before the goods move.
Does a Pro Forma Invoice Need GST?
You will normally show GST on a pro forma invoice, because the buyer needs to know the real total they are committing to. But showing it is not the same as accounting for it. A pro forma invoice is not taxable supply information under New Zealand's GST rules, which means:
- Your customer cannot claim the GST on a pro forma invoice in their GST return. They need the actual invoice.
- You do not return the GST on it either, because no supply has yet taken place.
- It should be clearly labelled. Mark it “Pro Forma Invoice” and, ideally, add a line stating it is not a tax invoice. That one sentence prevents most of the confusion.
Once the goods are supplied or the payment is taken, you issue the real document carrying full taxable supply information. Since 1 April 2023 that no longer has to be headed “Tax Invoice” — see whether you still need a tax invoice in NZ for what must be on it, and the invoicing guide for the wider cluster.
This is a plain-English summary, not tax advice. Check ird.govt.nz or your accountant for your own circumstances.
Pro Forma Invoice vs Quote vs Invoice
| Quote | Pro Forma Invoice | Invoice | |
|---|---|---|---|
| Stage | Before agreement | Agreed in principle, not yet supplied | After supply (or on payment) |
| Creates a debt? | No | No | Yes |
| Valid for GST? | No | No | Yes |
| Figures can change? | Yes | Yes, but rarely do | Only via a credit note |
| Typical purpose | Win the work | Unlock a PO, deposit or import clearance | Get paid and record the sale |
For a closer look at the first and last columns, see quote vs invoice.
When NZ Wholesalers and Manufacturers Use Them
Pro forma invoices show up in a handful of specific trade situations:
- Deposits on made-to-order goods. A commercial furniture manufacturer quoting a $34,000 fit-out issues a pro forma invoice for the 40% deposit so the buyer's finance team has something concrete to pay against.
- New customers with no trade account. Where a supplier wants payment before dispatch, a pro forma invoice is the document the buyer pays from. It is a common step before a customer graduates onto terms.
- Imports and freight. Customs brokers and freight forwarders frequently ask for a pro forma invoice to value a shipment before the commercial invoice exists.
- Internal approval. Larger buyers often cannot raise a purchase order from a quote, but can from something invoice-shaped.
That second case is worth sitting with. Requiring payment before dispatch protects the supplier, but it also puts the whole cost on the buyer upfront, which is exactly when larger orders get trimmed. Offering an instalment option at that moment is often a better answer than either carrying the credit yourself or losing the order size.
Frequently Asked Questions
Can a customer claim GST on a pro forma invoice in NZ?
No. A pro forma invoice is not taxable supply information, so it does not support a GST claim. The customer needs the actual invoice issued once the supply has taken place.
Is a pro forma invoice legally binding?
Generally no — it does not create a debt the way an invoice does, and the figures can still change. Whether a binding contract exists depends on what the parties actually agreed, not on the document's name.
What is the difference between a pro forma invoice and a quote?
A quote is an offer, usually with a validity period, inviting the buyer to accept. A pro forma invoice assumes agreement and shows the exact figures the final invoice will carry, so the buyer can raise a purchase order or pay a deposit.
Do I need to issue a real invoice after a pro forma invoice?
Yes, if you are GST registered and the supply goes ahead. The pro forma invoice has no GST standing, so you still need to provide full taxable supply information for the completed sale.
Should a pro forma invoice have an invoice number?
Give it its own reference, but keep it out of your main invoice sequence so it is never mistaken for a real sale in your accounts. Many NZ suppliers use a separate PF prefix.
Asking for Payment Upfront Shouldn't Shrink the Order
Where a pro forma invoice exists because you need paying before dispatch, PaidTerms is the other option: you are paid the full invoice upfront and your customer pays over time.
Read next: do you still need a tax invoice in NZ?, or quote vs invoice.
