BR-AE-10: Reverse-charge breakdown without exemption reason

StandardEN 16931-1 (European e-invoicing semantic model)SeverityError: the invoice is rejectedSyntaxUBL, CIIBusiness terms

BG-23 VAT breakdown
BT-118 VAT category code
BT-120 VAT exemption reason text
BT-121 VAT exemption reason code

Applies toEvery EN 16931 invoice: XRechnung, ZUGFeRD 2.x / Factur-X (profiles EN 16931, EXTENDED, XRECHNUNG), Peppol BIS Billing 3.0, and national CIUS such as the Dutch NLCIUS or the Italian/Spanish profiles.

Official rule text

[BR-AE-10] A VAT breakdown (BG-23) with VAT Category code (BT-118) "Reverse charge" shall have a VAT exemption reason code (BT-121), meaning "Reverse charge" or the VAT exemption reason text (BT-120) "Reverse charge" (or the equivalent standard text in another language).

Why this error occurs

A VAT breakdown with category AE (reverse charge) must carry an exemption reason code (BT-121) meaning reverse charge, or reason text (BT-120) saying "Reverse charge" or the equivalent in another language. The rule looks for cbc:TaxExemptionReasonCode or cbc:TaxExemptionReason in the cac:TaxCategory with ID AE (UBL), or ram:ExemptionReasonCode / ram:ExemptionReason in the ram:ApplicableTradeTax with CategoryCode AE (CII). EU VAT law requires the mention "Reverse charge" on such invoices so the buyer knows he owes the VAT. Typical cause: the ERP sets the category but has no text field mapped.

How to fix it

Add cbc:TaxExemptionReasonCode with VATEX-EU-AE and/or cbc:TaxExemptionReason with the text "Reverse charge" (German: "Steuerschuldnerschaft des Leistungsempfängers" or "Umkehrung der Steuerschuldnerschaft"). In CII put ram:ExemptionReasonCode VATEX-EU-AE and/or ram:ExemptionReason in the AE ram:ApplicableTradeTax. The rate must be 0 and the tax amount 0.00; also give the buyer VAT identifier (BT-48) and seller VAT identifier (BT-31), which the AE rules require.

Example (valid)

<cac:TaxCategory>
  <cbc:ID>AE</cbc:ID>
  <cbc:Percent>0</cbc:Percent>
  <cbc:TaxExemptionReasonCode>VATEX-EU-AE</cbc:TaxExemptionReasonCode>
  <cbc:TaxExemptionReason>Reverse charge</cbc:TaxExemptionReason>
  <cac:TaxScheme><cbc:ID>VAT</cbc:ID></cac:TaxScheme>
</cac:TaxCategory>

What the validator checks

Checked element (context):

UBL

/*/cac:TaxTotal/cac:TaxSubtotal/cac:TaxCategory[normalize-space(cbc:ID) = 'AE'][cac:TaxScheme/normalize-space(upper-case(cbc:ID))='VAT']

Test (XPath):

exists(cbc:TaxExemptionReason) or (exists(cbc:TaxExemptionReasonCode) )

CII

//rsm:SupplyChainTradeTransaction/ram:ApplicableHeaderTradeSettlement/ram:ApplicableTradeTax/ram:CategoryCode[. = 'AE'][upper-case(../ram:TypeCode) = 'VAT']

Test (XPath):

(../ram:ExemptionReason) or (../ram:ExemptionReasonCode)

Check your invoice

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Same check via API:

curl -F file=@invoice.xml https://einvoicechecker.com/v1/validate

Related rules

BR-AF-10 A VAT breakdown with VAT Category code "IGIC" shall not have a VAT exemption reason…
BR-AG-10 A VAT breakdown with VAT Category code "IPSI" shall not have a VAT exemption reason…
BR-E-10 VAT-exempt breakdown without exemption reason
BR-G-10 A VAT breakdown with the VAT Category code "Export outside the EU" shall have a VAT…
BR-IC-10 A VAT breakdown with the VAT Category code "Intra-community supply" shall have a VAT…
BR-O-10 A VAT breakdown with VAT Category code " Not subject to VAT" shall have a VAT…
BR-S-10 A VAT breakdown with VAT Category code "Standard rate" shall not have a VAT exemption…
BR-Z-10 Zero-rated breakdown must not carry an exemption reason

Frequently asked questions

What does BR-AE-10 mean?

BR-AE-10 is a en 16931 core rule: A VAT breakdown (BG-23) with VAT Category code (BT-118) "Reverse charge" shall have a VAT exemption reason code (BT-121), meaning "Reverse charge" or the VAT exemption reason text (BT-120) "Reverse charge" (or the equivalent standard text in another language).

Will my invoice be rejected because of BR-AE-10?

Yes. BR-AE-10 is flagged "fatal"; validators (KoSIT, Peppol access points, the German ZRE/OZG-RE portals) reject the invoice until it is fixed.

Which formats does BR-AE-10 apply to?

Every EN 16931 invoice: XRechnung, ZUGFeRD 2.x / Factur-X (profiles EN 16931, EXTENDED, XRECHNUNG), Peppol BIS Billing 3.0, and national CIUS such as the Dutch NLCIUS or the Italian/Spanish profiles. Syntax: UBL and CII.

Source: EN 16931-1:2017 schematron (CEN TC434, via Peppol BIS 3.0.20). Catalogue generated from the official schematron on 2026-10-14.