BR-FXEXT-AG-08REV: Category M exemption reasons should match the VAT breakdown

What it means

For each VAT breakdown entry (BG-23) with category M (BT-118), the taxable amount (BT-116) must equal the lines minus the discounts plus the charges in category M, as in BR-FXEXT-AG-08B. In addition, where an exemption reason is given, the reason text (BT-194, BT-173, BT-175) and reason code (BT-195, BT-174, BT-176) on the lines, discounts and charges must be identical to the exemption reason text (BT-120) and code (BT-121) of the breakdown entry. A rounding difference of up to 0.01 is allowed for each amount counted, and only normal lines count (subtype DETAIL or none).

Why it matters

The exemption reason tells the buyer and the tax authority why VAT is treated differently in this category. If the lines give one reason and the breakdown another, the invoice contradicts itself. It is only a warning, but it is worth fixing because a mismatch is likely to raise questions from the buyer or an auditor.

How to fix it

Open the category M lines, discounts and charges and read the exemption reason on each one. Make the text and code identical to the exemption reason on the category M row in the VAT breakdown, or change the breakdown if that is the one that is wrong. Then check that the taxable amount of that row equals the amounts in the category, as described under BR-FXEXT-AG-08B.

The rule as published

In a VAT breakdown (BG-23) where VAT category code (BT-118) is equal to “M” ("Ceuta and Mellita tax"), Absolute Value of (VAT category taxable amount (BT-116) - ∑ Invoice line net amounts (BT-131) + Σ Document level allowance amounts (BT-92) - Σ Document level charge amounts (BT-99) - Σ Logistics Service fee amounts (BT-x-272)) <= 0,01 * ((Number of line net amounts (BT-131) + Number of Document level allowance amounts (BT-92) + Number of Document level charge amounts (BT-99) + Number of Logistics Service fee amounts (BT-X-272)), where the VAT category code (BT-151, BT-95, BT-102, BT-X-273) is "Ceuta and Mellita tax" (M), and where applicable the VAT exemption reason and specification code (BT-195, BT-174 and BT-176 and BT-X-592) and the Exemption reason text (BT-194, BT-173 and BT-175 and BT-X-591) are identical with the VAT category VAT exemption reason and specification code (BT-121) and VAT exemption reason text (BT-120), but only for lines where the "Subtype of invoice item" (BT-X-8) has the value "DETAIL" or is not specified.

Business terms: BG-23, BT-92, BT-95, BT-99, BT-102, BT-116, BT-118, BT-120, BT-121, BT-131, BT-151, BT-173, BT-174, BT-175, BT-176, BT-194, BT-195

Where this rule applies