Reference

BR-O-10 Not-subject-to-VAT breakdown needs an exemption reason

A VAT breakdown (BG-23) with VAT category code (BT-118) "Not subject to VAT" (O) shall carry a VAT exemption reason code (BT-121) meaning "Not subject to VAT", or a VAT exemption reason text (BT-120) stating "Not subject to VAT" (or the equivalent standard text in another language).

Problem Description

ERROR

EN 16931 VAT category rule

Context and Significance

The exemption reason explains to the buyer and the tax authority why no VAT applies to a supply outside the scope of VAT; the code is VATEX-EU-O. In practice, the error occurs when the note appears only on the PDF, or when a code for exempt supplies is used instead of VATEX-EU-O.

Solution

Add cbc:TaxExemptionReasonCode = VATEX-EU-O or cbc:TaxExemptionReason = "Not subject to VAT" to the O TaxCategory.

Quick actions

Validate XML Convert invoice

Valid Examples

O breakdown with BT-121 = VATEX-EU-O
O breakdown with BT-120 = "Not subject to VAT"

Invalid Examples

O breakdown with neither BT-121 nor BT-120 provided

Code Examples

Valid XML

<cac:TaxCategory>
  <cbc:ID>O</cbc:ID>
  <cbc:TaxExemptionReasonCode>VATEX-EU-O</cbc:TaxExemptionReasonCode>
  <cbc:TaxExemptionReason>Not subject to VAT</cbc:TaxExemptionReason>
  <cac:TaxScheme><cbc:ID>VAT</cbc:ID></cac:TaxScheme>
</cac:TaxCategory>

Invalid XML

<cac:TaxCategory>
  <cbc:ID>O</cbc:ID>
  <cac:TaxScheme><cbc:ID>VAT</cbc:ID></cac:TaxScheme>
</cac:TaxCategory>

Affected Fields

BT-118 VAT category code

BT-120 VAT exemption reason text

BT-121 VAT exemption reason code

Validation Tools

Official KoSIT Validator

Run the official KoSIT validator with the XRechnung configuration to check EN 16931 and XRechnung rules.

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