BR-E-10: VAT exemption reason is missing

A rule from EN 16931. What the message means and how to fix it.

What the message means

Whoever uses VAT category E (exempt) must say why in the VAT breakdown (BG-23): with an exemption reason text (BT-120) or code (BT-121). It is the most common error on invoices from small businesses under a VAT exemption scheme: the legal reference appears only in the free-text note, not in the exemption reason.

How to fix it

Write the reason into BT-120 “VAT exemption reason text”, for example the legal basis of the exemption (in Germany “Kleinunternehmer gemäß § 19 UStG”), or use a VATEX code in BT-121 “VAT exemption reason code”. The correct wording is a question for your tax adviser; for the format any text is enough.

Where the field is in the file

UBL: cac:TaxTotal/cac:TaxSubtotal/cac:TaxCategory/cbc:TaxExemptionReason
CII: ram:ApplicableHeaderTradeSettlement/ram:ApplicableTradeTax/ram:ExemptionReason

The rule applies to every format built on EN 16931: Peppol BIS Billing 3.0, XRechnung, ZUGFeRD and Factur-X, and other national CIUS.

Check the invoice again: The free validator runs the official KoSIT rule files (EN 16931 rules for UBL and CII, plus the German XRechnung rules) in your browser. Your invoice never leaves your computer, and the report links to the English explanations.

All error codes

Technical notes on the data format, not tax or legal advice. Whether VAT rate, supply and amounts are correct in substance is a question for your tax adviser.