Proforma Invoice Templates for Malaysia

Key Features of a Proforma Invoice

• Non-binding in Nature: It’s not a legal or taxable document—just an estimate.
• Fully Itemised: Lists quantities, prices, descriptions, shipping charges, duties, etc.
• Not Recorded in Accounts: It doesn’t enter your books like a tax invoice would.
• Used for Approvals: Helpful in getting internal sign-offs or external funding.
• Supports Customs Declarations: In cross-border deals, it helps declare value in advance.
• Basis for E-Invoice: The details in a proforma often form the base for the final e-invoice.

Common Uses in Malaysian Business

Here’s how Malaysian businesses use proforma invoices in daily operations:

• Avoid Premature Tax Liability: Avoid triggering SST or e-invoice obligations before the deal is confirmed.
• Internal Approvals: Use them for budgeting and approvals before committing to purchases.
• Customs Clearance for Export/Import: Declare the value of goods in advance to facilitate customs paperwork.
• Negotiations: Proforma invoices help buyers and sellers agree on pricing and terms before finalising a deal.
• Banking & Letters of Credit: Banks often require a proforma invoice to assess risk before issuing credit.
• Inventory Planning: Sellers can use it to forecast demand and manage stock efficiently.
• Insurance or Escrow: In overseas transactions, proformas support insurance filings or escrow account setup.

Proforma Invoice vs Tax Invoice vs Quotation – Explained

Purpose: A proforma invoice is used as a preliminary estimate that outlines the details of a proposed sale. A tax invoice is a legal document issued after a sale, demanding payment and showing applicable SST. A quotation is simply an offer of price, shared before the transaction begins.

Timing: You send a proforma invoice before finalizing the deal or delivery. A tax invoice is issued after goods or services are delivered or payment is due. A quotation is generally shared at the initial stage, before any formal agreement.

Legal Standing: A proforma invoice is not legally binding and is not accepted for tax or accounting purposes. In contrast, a tax invoice is legally binding and must be reported under SST regulations. A quotation is also non-binding unless accepted by the buyer in writing or through a purchase order.

Tax Details: Both proforma invoices and tax invoices include tax details. However, only the tax invoice is officially submitted for SST or e-invoicing compliance. A quotation usually does not show tax details unless specified.

Usage Scenarios: Use a proforma invoice for customs declarations, credit applications, or internal purchase approvals. A tax invoice is used for final billing and SST reporting. A quotation is used for price comparison, negotiation, or getting budgetary approval.

Accounting Relevance: A proforma invoice is not recorded in your books. A tax invoice is an official accounting document. A quotation only becomes relevant for accounting once accepted and converted into a purchase order or invoice.