# BR-E-05 Exempt invoice line VAT rate must be 0

In an invoice line (BG-25) where the invoiced item VAT category code (BT-151) is "Exempt from VAT" (E), the invoiced item VAT rate (BT-152) shall be 0 (zero).

## Problem Description

> **ERROR**: EN 16931 VAT category rule

## Context and Significance

An exempt supply carries no VAT: a rate above zero contradicts category E and distorts the VAT breakdown. In practice, the error occurs when software keeps the usual rate of the item (for example 19 %) after the line is switched to category E. Exempt allowances and charges are covered by BR-E-06 and BR-E-07.

## Solution

Set cac:InvoiceLine/cac:Item/cac:ClassifiedTaxCategory/cbc:Percent (BT-152) to 0 on every line with category E. If VAT is actually due, use category S with the applicable rate instead.

- [Validate XML](/en/xrechnung-validator?source=resource&rule=BR-E-05)
- [Convert invoice](/en/pdf-to-xrechnung?source=resource&rule=BR-E-05)

## Valid Examples

- Line with BT-151 = E and BT-152 = 0

## Invalid Examples

- Line with BT-151 = E and BT-152 = 19

## Code Examples

### Valid XML
```
<cac:InvoiceLine>
  <cac:Item>
    <cac:ClassifiedTaxCategory>
      <cbc:ID>E</cbc:ID>
      <cbc:Percent>0</cbc:Percent>
      <cac:TaxScheme><cbc:ID>VAT</cbc:ID></cac:TaxScheme>
    </cac:ClassifiedTaxCategory>
  </cac:Item>
</cac:InvoiceLine>
```

### Invalid XML
```
<cac:InvoiceLine>
  <cac:Item>
    <cac:ClassifiedTaxCategory>
      <cbc:ID>E</cbc:ID>
      <cbc:Percent>19</cbc:Percent>
      <cac:TaxScheme><cbc:ID>VAT</cbc:ID></cac:TaxScheme>
    </cac:ClassifiedTaxCategory>
  </cac:Item>
</cac:InvoiceLine>
```

## Affected Fields

- [BT-151 Invoiced item VAT category code](/resources/xrechnung/bt-151-invoice-line-vat-category-code)
- [BT-152 Invoiced item VAT rate](/resources/xrechnung/bt-152-invoice-line-vat-category-rate)

## Related Rules

- [BR-E-01](/resources/kosit-validator-errors/br-e-01-exempt-vat-breakdown-required)
- [BR-E-06](/resources/kosit-validator-errors/br-e-06-exempt-allowance-rate-zero)
- [BR-E-07](/resources/kosit-validator-errors/br-e-07-exempt-charge-rate-zero)

## Validation Tools

- [Official KoSIT Validator](https://github.com/itplr-kosit/validator): Run the official KoSIT validator with the XRechnung configuration to check EN 16931 and XRechnung rules.
- [Convert PDF to XRechnung](/pdf-to-xrechnung): Find validation errors during conversion and review each correction.

## Related Resources

- [Official Specification](https://docs.peppol.eu/poacc/billing/3.0/rules/ubl-tc434/)
- [Test Suite](https://github.com/itplr-kosit/xrechnung-testsuite)
- [All validation errors](/resources/kosit-validator-errors): Overview of the EN 16931, XRechnung and Peppol validation rules explained here.