Reference

BR-S-10 Standard-rated VAT breakdown must not carry an exemption reason

A VAT breakdown (BG-23) with VAT category code (BT-118) "Standard rated" shall not have a VAT exemption reason code (BT-121) or VAT exemption reason text (BT-120).

This EN16931 rule prevents a category S breakdown from carrying an exemption reason, which would contradict the fact that VAT is charged. In practice, the error occurs when an invoice template adds a fixed exemption text to every VAT breakdown, or when a line is changed from E to S but the old reason stays in the export.

Solution

Remove cbc:TaxExemptionReasonCode (BT-121) and cbc:TaxExemptionReason (BT-120) from the standard-rated TaxCategory. An exemption reason belongs only to categories where the seller charges no VAT (E exempt, AE reverse charge, K intra-community supply, G export, O not subject to VAT), never to categories S or Z.

Quick actions

Validate XML Convert invoice

Valid Examples

BG-23 with BT-118 = S, BT-119 = 19 and no BT-120 or BT-121

Invalid Examples

BG-23 with BT-118 = S but carrying BT-120 = "Exempt supply"

Code Examples

Valid XML

<cac:TaxSubtotal>
  <cbc:TaxableAmount currencyID="EUR">100.00</cbc:TaxableAmount>
  <cbc:TaxAmount currencyID="EUR">19.00</cbc:TaxAmount>
  <cac:TaxCategory><cbc:ID>S</cbc:ID><cbc:Percent>19</cbc:Percent><cac:TaxScheme><cbc:ID>VAT</cbc:ID></cac:TaxScheme></cac:TaxCategory>
</cac:TaxSubtotal>

Invalid XML

<cac:TaxSubtotal>
  <cbc:TaxableAmount currencyID="EUR">100.00</cbc:TaxableAmount>
  <cbc:TaxAmount currencyID="EUR">19.00</cbc:TaxAmount>
  <cac:TaxCategory>
    <cbc:ID>S</cbc:ID><cbc:Percent>19</cbc:Percent>
    <cbc:TaxExemptionReason>Exempt supply</cbc:TaxExemptionReason>
    <cac:TaxScheme><cbc:ID>VAT</cbc:ID></cac:TaxScheme>
  </cac:TaxCategory>
</cac:TaxSubtotal>