VAT Invoice vs Receipt vs Proforma: What's the Difference?

Three documents that look similar, mean different things, and confuse customers and finance teams every week. A VAT invoice is a tax document; a receipt is proof of payment; a proforma is a quote dressed up as an invoice. Issuing the wrong one can cost your customer their input VAT recovery and you a compliance problem.

The short version

• VAT invoice (or tax invoice): a legal document that creates a VAT liability for the supplier and a deduction right for the customer. Mandatory content set by law. Required for any taxable supply where the customer is a VAT-registered business.
• Receipt: proof that money changed hands. Often produced at point of sale. Sometimes acceptable as a simplified VAT invoice if it carries the right fields. Not always sufficient to claim back input VAT.
• Proforma invoice: a preliminary document. Not a tax invoice. Does not trigger VAT. Used for quotes, customs declarations, deposit requests, and intent-to-pay scenarios.

VAT invoice (tax invoice)

The VAT invoice is the document that:

• Records the supply for VAT purposes.
• Allows the customer to deduct input VAT in their return.
• Determines the tax point in jurisdictions where the invoice date controls (the "invoice date or supply date, whichever is earlier" rule).
• Carries country-specific mandatory fields (sequential number, supplier and customer VAT numbers, VAT rate and amount, reverse charge narrative if applicable).

Required content varies by country. The EU, UK, UAE, Saudi Arabia, and Japan each have their own rules. We cover the country-by-country requirements in the invoice requirements guide and the language and wording in the narratives guide.

When you must issue one

• Any taxable supply to a VAT-registered customer (B2B), if requested.
• Cross-border B2B services where reverse charge applies (the customer needs the invoice to self-assess).
• Within a defined deadline: 15 days from the end of the month of supply in the EU, varying nationally.

When you don't have to (but often should)

• B2C retail sales below the simplified-invoice threshold.
• Exempt or out-of-scope supplies (some countries still require a document, just not a tax invoice).

Receipt (and the simplified VAT invoice)

A receipt is just evidence of payment. Most receipts in their plain form are not VAT invoices. They become a simplified VAT invoice only if they carry the minimum required fields, and only below a value threshold.

Simplified VAT invoice thresholds

• EU: Member States may permit simplified invoices for amounts up to €100 (or up to €400 in limited cases). Article 220a.
• UK: Up to £250 (gross). Must show supplier name, address, VAT number, date, description, VAT rate, and gross amount.
• UAE: Up to AED 10,000. Must include "Tax Invoice" wording, supplier TRN, date, description, and VAT amount.
• Singapore: Up to S$1,000. Receipt acts as simplified tax invoice if it shows the GST registration number, date, description, total inclusive amount, and the words "Price Payable Includes GST".
• Australia: Up to A$82.50. The seller's ABN, date, brief description, and total are enough.

Above these thresholds, a B2B customer needs a full tax invoice to claim input VAT. A receipt alone is not sufficient.

What a receipt typically shows

• Supplier name and address.
• Date of payment.
• Total amount paid.
• Method of payment.
• Sometimes a transaction reference and VAT line.

If the receipt is missing the supplier's VAT number, a sequential invoice-style number, or a clear breakdown of net plus VAT, a buyer's tax authority can refuse the input VAT deduction.

Proforma invoice

A proforma is the document you send before the supply happens. It looks like an invoice, lists what you will sell, and shows the price. But it is not a tax invoice. The label "Proforma" or "Pro-forma invoice" must appear on the document so it cannot be mistaken for a real one.

What proformas are used for

• Quotes: a price proposal in a more formal format than a casual quote email.
• Customs declarations: when the goods do not yet have a commercial value documented.
• Deposit requests: a document the customer can use to authorise an advance payment internally.
• Pre-shipment paperwork: for B2B supplies where the customer needs the document to begin processing payment internally.

What proformas do not do

• Trigger VAT. The supplier has no obligation to pay output VAT on a proforma.
• Allow the customer to claim input VAT. The customer must wait for the actual tax invoice.
• Count toward sequential invoice numbering. Most accounting systems treat proformas in a separate series.

The trap

If a proforma carries all the elements of a tax invoice but lacks the "Proforma" label, in many jurisdictions it is treated as a tax invoice anyway. Tax authorities care about substance over form. Always label it clearly. Better still, use a different layout (a different colour stripe, a watermark, the word "Quote" instead of "Invoice") to remove any ambiguity.

What about credit notes?

A credit note is a fourth document that lives in this family. It cancels or reduces a previously issued tax invoice. Credit notes are also tax documents and must reference the original invoice number, the reason for the credit, and the VAT being reversed. We cover credit notes in detail in the invoice correction guide.

Side-by-side comparison

For each document type, the answer to the four questions that matter:

Does it create a VAT liability for the supplier?

• Tax invoice: yes (at the tax point).
• Simplified tax invoice: yes.
• Receipt: only if it qualifies as a simplified tax invoice; otherwise no separate liability beyond the underlying supply.
• Proforma: no.

Can the customer claim back input VAT with it?

• Tax invoice: yes.
• Simplified tax invoice: yes, below the threshold.
• Receipt: only if it doubles as a simplified tax invoice.
• Proforma: no.

Does it carry mandatory tax fields?

• Tax invoice: yes, by law.
• Simplified tax invoice: yes, but a smaller set.
• Receipt: depends on whether it qualifies as simplified tax invoice.
• Proforma: no, although content is often mirrored from the eventual tax invoice.

Sequential numbering required?

• Tax invoice: yes.
• Simplified tax invoice: yes.
• Receipt: not for tax purposes, but accounting systems usually number them.
• Proforma: not in the tax-invoice series; usually a separate sequence.

Common mistakes

1. Treating Stripe receipts as VAT invoices. A Stripe-generated receipt is often missing the supplier's VAT number and the reverse charge narrative. For B2B customers in regulated jurisdictions, you need to issue a proper tax invoice in addition. See the Stripe VAT guide.
2. Sending a proforma without the "Proforma" label. Tax authorities can treat the document as a real invoice and assess VAT.
3. Skipping the tax invoice because the customer paid via credit card. Card payment is just a payment method; it does not replace the tax invoice obligation.
4. Issuing a tax invoice for a deposit the customer hasn't authorised. Deposit invoices can trigger the tax point in some jurisdictions even before the full supply happens. Use a proforma for unagreed deposits, then a real invoice when the deposit is paid.
5. Mixing series. Proforma numbers and tax invoice numbers should never share a sequence. Auditors look for gaps.

Country e-invoicing changes the picture

In jurisdictions with mandatory e-invoicing, the tax invoice is the cleared XML document submitted to the tax authority's platform. The PDF the customer sees is a rendering of that XML. Proformas are typically out of scope of the e-invoicing platform, which is why they remain a useful pre-supply document. Receipts in B2C contexts are often submitted to the platform as separate B2C reporting items.

The current state for any jurisdiction is in our free e-invoicing mandate tracker: format, clearance model, language, and effective date for 150 jurisdictions.

Recap

• Tax invoice: the legal document. Required for B2B. Carries mandatory fields. Triggers the tax point. Lets the customer claim input VAT.
• Receipt: proof of payment. Sometimes also a simplified tax invoice below a value threshold. Not always sufficient for input VAT recovery.
• Proforma: pre-supply document. Quote, customs paperwork, deposit request. Does not trigger VAT.
• Always label proformas clearly so they are not mistaken for tax invoices.
• For e-invoicing jurisdictions, the tax invoice is the cleared XML; the PDF is a rendering.