BG-23VAT breakdownBT-118VAT category codeBT-120VAT exemption reason textBT-121VAT exemption reason code
Official rule text
[BR-E-10] A VAT breakdown (BG-23) with VAT Category code (BT-118) "Exempt from VAT" shall have a VAT exemption reason code (BT-121) or a VAT exemption reason text (BT-120).
Why this error occurs
A VAT breakdown with category E (exempt from VAT) must state why the supply is exempt, either as an exemption reason code (BT-121) or as reason text (BT-120). The rule looks for cbc:TaxExemptionReasonCode or cbc:TaxExemptionReason inside the cac:TaxCategory with ID E (UBL), or ram:ExemptionReasonCode / ram:ExemptionReason in the ram:ApplicableTradeTax with CategoryCode E (CII). The buyer needs this to verify the exemption and, in many countries, the invoice must legally carry a reference to the exemption provision. Software often has the category mapped but no field for the reason.
How to fix it
Add cbc:TaxExemptionReasonCode with a code from the VATEX list (e.g. VATEX-EU-132 for Art. 132 exemptions, VATEX-EU-79-C, VATEX-EU-IC for intra-community supply, VATEX-FR-FRANCHISE) and/or cbc:TaxExemptionReason with the legal reason as text, e.g. "Exempt under Article 132 VAT Directive" or for German small businesses "Kein Ausweis von Umsatzsteuer gemäß § 19 UStG". In CII use ram:ExemptionReasonCode / ram:ExemptionReason in the same ram:ApplicableTradeTax. Keep cbc:Percent 0 and the tax amount 0.00 for this group. One reason per breakdown group is enough; it is not needed on each line.
Example (valid)
<cac:TaxCategory>
<cbc:ID>E</cbc:ID>
<cbc:Percent>0</cbc:Percent>
<cbc:TaxExemptionReasonCode>VATEX-EU-132</cbc:TaxExemptionReasonCode>
<cbc:TaxExemptionReason>Exempt under Article 132 of the VAT Directive</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) = 'E'][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[. = 'E'][upper-case(../ram:TypeCode) = 'VAT']Test (XPath):
(../ram:ExemptionReason) or (../ram:ExemptionReasonCode)Check your invoice
Drop your XML or PDF on the validator and every failed rule is linked to its page here. Free, no account, the file is not stored.
Same check via API:
curl -F file=@invoice.xml https://einvoicechecker.com/v1/validateRelated rules
BR-AE-10Reverse-charge breakdown without exemption reasonBR-AF-10A VAT breakdown with VAT Category code "IGIC" shall not have a VAT exemption reason…BR-AG-10A VAT breakdown with VAT Category code "IPSI" shall not have a VAT exemption reason…BR-G-10A VAT breakdown with the VAT Category code "Export outside the EU" shall have a VAT…BR-IC-10A VAT breakdown with the VAT Category code "Intra-community supply" shall have a VAT…BR-O-10A VAT breakdown with VAT Category code " Not subject to VAT" shall have a VAT…BR-S-10A VAT breakdown with VAT Category code "Standard rate" shall not have a VAT exemption…BR-Z-10Zero-rated breakdown must not carry an exemption reason
Frequently asked questions
What does BR-E-10 mean?
BR-E-10 is a en 16931 core rule: A VAT breakdown (BG-23) with VAT Category code (BT-118) "Exempt from VAT" shall have a VAT exemption reason code (BT-121) or a VAT exemption reason text (BT-120).
Will my invoice be rejected because of BR-E-10?
Yes. BR-E-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-E-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.