Proforma invoices and final invoices

What a proforma invoice is

A proforma invoice is a request for an advance payment before the actual supply takes place. It serves as the basis for the payment, but on its own it's not a tax document — a non-VAT payer can use it with no restrictions, but a VAT payer must issue a tax document for the received payment once the advance arrives.

This article covers the issuing side — advances you receive from your own clients. Advances that you pay to your own suppliers are covered in Advances you pay to suppliers.

When to use a proforma invoice

• The job runs into the tens of thousands of CZK and you want to reduce the risk of non-payment.
• The supply will take a while (a 2–3 month project) and you need staged payments.
• The client wants a proforma invoice as the basis for internal payment approval.

How to issue a proforma invoice in Taxorio

1. Go to the Invoices section and click New invoice.
2. Above the form, switch from Standard invoice to Proforma invoice.
3. Pick the client, enter a description of the advance (e.g. "50% advance for website development") and the advance amount.
4. For VAT payers: choose the relevant VAT rate — the advance is taxed at the rate that applies to the supply on the day the advance is received (§ 47(2) ZDPH).
5. Save and send it to the client by email.

Confirming a received advance

1. Once the money arrives, open the proforma invoice's detail and click Advance paid (the dialog asks for the date the payment was received).
2. VAT payer: a tax document for the received payment is created (DDZ sequence) with its date of taxable supply (DUZP) set to the payment date — it goes into the return and the VAT control statement. The exception is an advance under domestic reverse charge (§ 92a), for goods supplied to the EU and for exports: receiving the advance does not trigger the obligation to report tax, so no tax document is created and the proforma invoice is simply marked as paid.
3. Non-payer and identified person (flat-rate tax regime included): you don't state Czech VAT on your documents, so no tax document for the received advance is created — the proforma invoice is simply marked as paid and it carries the income itself. For an advance on a service to the EU, an identified person reports the payment in the EC Sales List for the month it was received; Taxorio does not issue the document for that payment, which is due within 15 days after the end of that month.

Recorded the payment by mistake, or with the wrong date? On the proforma invoice's detail, use More actions → Clear payment. The proforma invoice goes back to unpaid and the tax document for the received payment is cancelled; then you confirm the advance again with the correct date. The payment date can't be rewritten by editing — it's tied to the tax document's DUZP.

Final invoice deducting the advance

Once the goods or service are delivered, issue a final invoice — always from the detail of the paid proforma invoice, using the Issue final invoice button. That's the only way the document stays linked to the right advance.

1. Open the paid proforma invoice's detail and click Issue final invoice.
2. The form pre-fills the items from the proforma invoice — it's the same supply. If you're invoicing for more than the advance covered, add another item; don't overwrite the pre-filled one.
3. Taxorio calculates the advance deduction on its own — a locked row appears among the items that can't be edited or deleted. For a VAT payer it's deducted per the tax document for the payment (by rate); for a non-payer, the advance amount actually paid is deducted directly.
4. Save. The client only pays the difference — and if the advance covered the whole price, the final invoice comes to CZK 0 due. That's the correct outcome; the document serves as proof the supply took place.

VAT rate change between the advance and the supply

The advance stays taxed at the rate that applied on the day it came in. If the supply is already at a different rate — from 1 January 2027, for example, non-alcoholic drinks served in a restaurant are at 12 % instead of 21 % — the balance is taxed at the rate valid on the date of supply and the VAT on the advance does not change (§ 37a ZDPH). Taxorio therefore deducts the advance base at the supply's rate. Example: an advance of CZK 10,000 + 21 % paid in December 2026, a supply of CZK 20,000 excl. VAT at 12 % in January 2027 → the final invoice deducts CZK 10,000 + 12 % and the client pays CZK 11,200. The deduction on the document (CZK 11,200) is lower than the advance paid (CZK 12,100) — the difference is the VAT on the advance, which stays declared at 21 %.

• Check the item rates. The form pre-fills the items from the proforma invoice including its rate — for a supply after a rate change, overwrite it with the new one.
• Would the advance exceed the supply (an overpayment)? The overpayment is returned at the advance's rate — with a credit note to the tax document for the advance, not with the final invoice.
• Items at several rates and an advance at a rate none of the items has: Taxorio won't issue such a final invoice, because it can't tell which item the advance belongs to. Settle the advance only with the items it was paid for and invoice the rest separately.
• What Taxorio can't detect: an advance at 21 % for both non-alcoholic and alcoholic drinks and a final invoice with non-alcoholic drinks at 12 % and alcohol at 21 % — the 21 % rate is on both sides, so the advance is deducted at 21 %. Check such a final invoice with your accountant.

VAT on an advance — important for VAT payers

A VAT payer is legally required to declare VAT on received advances. Specifically:

• The moment the advance is received the obligation to declare VAT arises, along with 15 days to issue a tax document for the received payment.
• Confirming the payment with the Advance paid button makes Taxorio issue the VAT payer a tax document for the received payment (DDZ sequence) right away — it doesn't ask, it's a legal obligation (except under § 92a, for goods to the EU and exports, see above). The document enters both the VAT control statement and the VAT return.
• The advance enters the VAT return for the tax period in which it was paid.
• On the final invoice the advance (VAT included) is deducted — only the difference then enters the VAT return. If the rate changed between the advance and the supply, the difference is taxed at the rate on the date of supply (see above).

When something goes wrong — what to correct

• Payment never arrived / wrong date → Clear payment on the proforma invoice (this also cancels the tax document for the payment), then confirm it again.
• Money is being refunded and there's no final invoice yet → a credit note against the tax document for the advance, after which the proforma invoice can also be cancelled.
• The final invoice already exists → the tax document for the advance can't be corrected any more (the action is locked). Price changing → a credit note against the final invoice for the whole supply. Supply never happened → cancel the final invoice first, only then correct the advance.
• A paid advance or final invoice can't be edited — a paid document simply can't be edited in Taxorio.
• Not a VAT payer and refunding an advance? You never had a tax document for the payment, so there's nothing to credit-note — clear the payment and cancel the proforma invoice. Watch out for the year: clearing the payment removes the income from the period the advance arrived in. If you're refunding it in a later year, once the earlier return is already filed, work it through with your accountant — you'd otherwise be rewriting a closed year yourself.

More detail in the article Credit notes and corrective documents.