What it means
A VAT breakdown (BG-23) with the category IGIC (BT-118) has a VAT exemption reason text (BT-120) or a VAT exemption reason code (BT-121). Neither may be present.
Why it matters
An exemption reason explains why no tax is charged. IGIC means tax is charged, so the two contradict each other and the recipient cannot tell which one is true. The invoice is rejected.
How to fix it
In the VAT summary of the invoice, find the IGIC entry and clear both the exemption reason text and the exemption reason code. If the goods are in fact exempt, change that entry's category to exempt and keep the reason there instead. A common cause is a tax code in your invoicing software that still carries an exemption reason, so check the tax code on the lines.
The rule as published
A VAT Breakdown (BG-23) with VAT Category code (BT-118) "IGIC" shall not have a VAT exemption reason code (BT-121) or VAT exemption reason text (BT-120). Business terms: BG-23, BT-118, BT-120, BT-121
Where this rule applies
| Rule set | Version |
|---|---|
| Peppol BIS Billing 3.0 (invoice) | 2026.5 |
| Peppol BIS Billing 3.0 (credit note) | 2026.5 |
| Factur-X 1.09 BASIC WL | 1.0.9-2 |
| Factur-X 1.09 BASIC | 1.0.9-2 |
| Factur-X 1.09 EN 16931 | 1.0.9-2 |
| ZUGFeRD 2.5 BASIC WL | 2.5.2 |
| ZUGFeRD 2.5 BASIC | 2.5.2 |
| ZUGFeRD 2.5 EN 16931 | 2.5.2 |
| SI-UBL 2.0 / NLCIUS (invoice) | 2.0.3.13 |
| SI-UBL 2.0 / NLCIUS (credit note) | 2.0.3.13 |
| NLCIUS (CII) | 1.0.3.13 |
Check your file
Drop your e-invoice to see whether BR-AF-10 still fails, and which other rules do.
Related rules
- BR-AE-10 Reverse charge needs the reverse charge note
- BR-AG-10 An IPSI VAT breakdown must not have an exemption reason
- BR-E-10 Exempt VAT needs an exemption reason
- BR-FXEXT-AE-08B Reverse-charge taxable amount must add up from the lines
- BR-FXEXT-AE-08REV Reverse-charge amounts should match per exemption reason
- BR-FXEXT-AF-08B Canary Islands taxable amount must add up from the lines