# BT-120 VAT Exemption Reason Text

A textual reason for VAT categories E, AE, K, G, or O. Do not use it for S, Z, L, or M.

> BT-120 gives the plain-language reason for VAT categories E, AE, K, G, or O. Provide BT-120 or the coded alternative BT-121. Do not use either field for S, Z, L, or M. Example: Reverse charge - VAT owed by the recipient.
>
> BT-120 · EN 16931 / XRechnung 3.x

## BT Reference Card

Key EN 16931 and XRechnung facts for this business term.

- **BT code**: BT-120
- **Name**: VAT Exemption Reason Text
- **Cardinality**: Conditional (C)
- **Business group**: BG-23 VAT BREAKDOWN
- **Data type**: Text
- **Example value**: Reverse charge - VAT owed by the recipient
- **Common error**: Provide BT-120 or BT-121 for categories E, AE, K, G, and O. Do not provide either field for S, Z, L, or M; BR-S-10, BR-Z-10, BR-AF-10, and BR-AG-10 forbid them.

## Taxes and totals

VAT treatment, tax breakdowns, and document totals that validators check closely.

- [Validate XML](/en/xrechnung-validator?source=resource&bt=BT-120)
- [Convert invoice](/en/pdf-to-xrechnung?source=resource&bt=BT-120)

## In plain language

A textual reason for VAT categories E, AE, K, G, or O. Do not use it for S, Z, L, or M.

Explains the VAT treatment to the buyer, accounting systems, and tax auditors when no VAT is charged.

## What you usually enter here

Free text reason aligned with the VAT category treatment

Typical valid values include: Reverse charge, Intra-community supply, VAT exempt service

Provide BT-120 or BT-121 for E, AE, K, G, and O. Do not provide either field for S, Z, L, or M.

## Where the field sits

BT-120 belongs to the Totals and tax part of the invoice. UBL 2.1 Syntax: Invoice › cac:TaxTotal › cac:TaxSubtotal › cac:TaxCategory › cbc:TaxExemptionReason. CII (UN/CEFACT) Syntax: rsm:CrossIndustryInvoice › rsm:SupplyChainTradeTransaction › ram:ApplicableHeaderTradeSettlement › ram:ApplicableTradeTax › ram:ExemptionReason.

## What goes wrong often

Avoid values like: Tax free

Relevant rule codes: BR-AE-10, BR-E-10, BR-G-10, BR-IC-10, BR-O-10, BR-S-10, BR-Z-10, BR-AF-10, BR-AG-10

## Valid Examples

- Reverse charge
- Intra-community supply
- VAT exempt service

## Invalid Examples

- Tax free

## Related Fields

- [BT-118 VAT Category Code](/resources/xrechnung/bt-118-vat-category-code)
- [BT-119 VAT Category Rate](/resources/xrechnung/bt-119-vat-category-rate)
- [BT-121 VAT Exemption Reason Code](/resources/xrechnung/bt-121-vat-exemption-reason-code)

## XML mapping and field facts

Open the technical reference if you need XML paths, validator rule codes, legal wording, or schema-specific mapping details.

### Field ID:
BT-120

### Data Type:
text

### Cardinality:
0..1

### Requirement:
Optional

## XML Implementation

### UBL 2.1 Syntax
```
/Invoice/cac:TaxTotal/cac:TaxSubtotal/cac:TaxCategory/cbc:TaxExemptionReason
```

### CII (UN/CEFACT) Syntax
```
/rsm:CrossIndustryInvoice/rsm:SupplyChainTradeTransaction/ram:ApplicableHeaderTradeSettlement/ram:ApplicableTradeTax/ram:ExemptionReason
```

## Validation Rules

### BR-AE-10
BR-AE-10

### BR-E-10
BR-E-10

### BR-G-10
BR-G-10

### BR-IC-10
BR-IC-10

### BR-O-10
BR-O-10

### BR-S-10
BR-S-10

### BR-Z-10
BR-Z-10

### BR-AF-10
BR-AF-10

### BR-AG-10
BR-AG-10

## Check whether your XRechnung sets BT-120 correctly

Upload the XML file to the free validator. It applies the KoSIT rules for XRechnung 3.0 and names each finding with its rule ID, for this field for example BR-AE-10, BR-E-10. Creating a new invoice instead? The converter checks the invoice against the same rules and shows the findings before download.

- [Validate XML](/en/xrechnung-validator)
- [Convert invoice](/en/pdf-to-xrechnung)

Free, no account needed. XML file up to 2 MB.

## Official sources and tools

- [KoSIT Validator](https://erechnungsvalidator.service-bw.de/)
- [XRechnung Standard](https://xeinkauf.de/xrechnung/)
- [Test Suite](https://github.com/itplr-kosit/xrechnung-testsuite)