# BR-IC-10 Intra-community breakdown needs an exemption reason

A VAT breakdown (BG-23) with the VAT category code (BT-118) "Intra-community supply" shall have a VAT exemption reason code (BT-121) meaning "Intra-community supply" (VATEX-EU-IC) or the VAT exemption reason text (BT-120) "Intra-community supply" (or its equivalent standard text in another language).

## Problem Description

A VAT breakdown (BG-23) with the VAT category code (BT-118) "Intra-community supply" shall have a VAT exemption reason code (BT-121) meaning "Intra-community supply" (VATEX-EU-IC) or the VAT exemption reason text (BT-120) "Intra-community supply" (or its equivalent standard text in another language).

> **ERROR**: XRechnung 3.0

## Context and Significance

The exemption reason documents the legal basis for charging no VAT, which the buyer’s tax authority requires to accept the intra-community exemption.

## Solution

Add cbc:TaxExemptionReasonCode = VATEX-EU-IC (or a matching cbc:TaxExemptionReason text) to the K TaxCategory.

- validate
- convert

## Valid Examples

- K breakdown with BT-121 = VATEX-EU-IC
- K breakdown with BT-120 = "Intra-community supply"

## Invalid Examples

- K breakdown with neither BT-121 nor BT-120 present

## Code Examples

### Valid XML
```
<cac:TaxCategory>
  <cbc:ID>K</cbc:ID>
  <cbc:Percent>0</cbc:Percent>
  <cbc:TaxExemptionReasonCode>VATEX-EU-IC</cbc:TaxExemptionReasonCode>
  <cbc:TaxExemptionReason>Intra-community supply</cbc:TaxExemptionReason>
  <cac:TaxScheme><cbc:ID>VAT</cbc:ID></cac:TaxScheme>
</cac:TaxCategory>
```

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

## Affected Fields

- [BT-118 VAT category code](/resources/xrechnung/bt-118-vat-category-code)
- [BT-121 VAT exemption reason code](/resources/xrechnung/bt-121-vat-exemption-reason-code)
- [BT-120 VAT exemption reason text](/resources/xrechnung/bt-120-vat-exemption-reason-text)

## Related Rules

- [BR-IC-01](/resources/kosit-validator-errors/br-ic-01-intra-community-vat-breakdown-required)
- [BR-CL-22](/resources/kosit-validator-errors/br-cl-22-vatex-tax-exemption-reason)
- [BR-CO-18](/resources/kosit-validator-errors/br-co-18-vat-breakdown-required)

## 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.