# BR-AE-10 Reverse charge VAT breakdown needs exemption reason

A reverse-charge VAT breakdown must include a tax exemption reason code or text.

## Problem Description

A reverse-charge VAT breakdown must include a tax exemption reason code or text.

> **ERROR**: XRechnung 3.0

## Context and Significance

The buyer needs a human-readable or coded reason to understand why VAT is not charged on reverse-charge lines.

## Solution

Add cbc:TaxExemptionReasonCode with a valid VATEX code or cbc:TaxExemptionReason text on the AE VAT category.

- validate
- convert

## Valid Examples

- VAT category AE with VATEX code VATEX-EU-AE

## Invalid Examples

- VAT category AE without exemption reason code or text

## Code Examples

### Valid XML
```
<cac:TaxCategory>
  <cbc:ID>AE</cbc:ID>
  <cbc:Percent>0</cbc:Percent>
  <cbc:TaxExemptionReasonCode>VATEX-EU-AE</cbc:TaxExemptionReasonCode>
  <cac:TaxScheme><cbc:ID>VAT</cbc:ID></cac:TaxScheme>
</cac:TaxCategory>
```

### Invalid XML
```
<cac:TaxCategory>
  <cbc:ID>AE</cbc:ID>
  <cbc:Percent>0</cbc:Percent>
  <cac:TaxScheme><cbc:ID>VAT</cbc:ID></cac:TaxScheme>
</cac:TaxCategory>
```

## Technical Details

### Affected Fields
BT-120 VAT exemption reason text, BT-121 VAT exemption reason code

## Related Rules

- [BR-AE-02](/resources/kosit-validator-errors/br-ae-02-reverse-charge-seller-vat-id-required)
- [BR-E-08](#)

## Validation Tools

- [Official KoSIT Validator](https://erechnungsvalidator.service-bw.de/): Validate your XRechnung files against all BR-DE rules.
- [Convert PDF to XRechnung](/pdf-to-xrechnung): Automatic validation error fixes when converting.

## Related Resources

- [Official Specification](https://xeinkauf.de/xrechnung/)
- [Test Suite](https://github.com/itplr-kosit/xrechnung-testsuite)
- [Complete Error List](/resources/kosit-validator-errors): Overview of all German XRechnung validation rules.