# BR-E-10

> A VAT breakdown (BG-23) with VAT Category code (BT-118) "Exempt from VAT" shall have a VAT exemption reason code (BT-121) or a VAT exemption reason text (BT-120).

Checked against Peppol BIS Billing 3.0 2026.5

Canonical: https://einvoicecheck.eu/rules/br-e-10

## Official rule text

A VAT breakdown (BG-23) with VAT Category code (BT-118) "Exempt from VAT" shall have a VAT exemption reason code (BT-121) or a VAT exemption reason text (BT-120).

## Why did my invoice fail BR-E-10?

Any VAT breakdown group (BG-23) with category code (BT-118) 'Exempt from VAT' must state why it is exempt, via either a VAT exemption reason code (BT-121) or a VAT exemption reason text (BT-120). This forces the invoice to justify the exemption for tax-audit purposes.

## Common causes

- Category set to E but neither the exemption reason code nor text supplied.
- Reason text placed at the wrong level instead of on the exempt TaxCategory.
- Empty string sent for the reason text, which does not satisfy the requirement.
- Using code E when the correct category (e.g. Z zero-rated, O out of scope) needs no reason.

## How do I fix it?

```
In the exempt cac:TaxCategory add <cbc:TaxExemptionReason>Exempt under Article 132 VAT Directive</cbc:TaxExemptionReason> (or a cbc:TaxExemptionReasonCode).
```