# BR-Z-10

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

Checked against Peppol BIS Billing 3.0 2026.5

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

## Official rule text

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

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

A VAT breakdown (BG-23) with category code "Z" (Zero rated) must not carry a VAT exemption reason code (BT-121) or VAT exemption reason text (BT-120). Zero rated is a taxed-at-0% category, not an exemption, so exemption reason fields are only valid for category E and must be absent here.

## Common causes

- TaxExemptionReason or TaxExemptionReasonCode was populated on the Z TaxCategory, often confusing zero-rated with exempt.
- A shared template adds an exemption reason to every non-standard category.
- Category should have been E (Exempt) rather than Z if an exemption reason genuinely applies.
- Leftover exemption text from a previous document revision.

## How do I fix it?

```
Remove exemption fields from the Z category, e.g. delete <cbc:TaxExemptionReasonCode> and <cbc:TaxExemptionReason> from the cac:TaxCategory where cbc:ID is Z.
```