BR-IC-10: Category K needs an exemption reason

What it means

A VAT breakdown entry (BG-23) with category K (intra-community supply) must carry a VAT exemption reason code (BT-121) or a VAT exemption reason text (BT-120) that says why no VAT is charged.

Why it matters

EU VAT law requires an invoice without VAT to say why. The buyer and the tax authority rely on that statement to accept that no VAT was charged. Without it the invoice is rejected.

How to fix it

In your invoicing software, open the VAT setting for this category and fill in the exemption reason. Use the code VATEX-EU-IC with the text "Intra-community supply", or the wording your national law requires. Most programs then print it on every invoice that uses the category.

The rule as published

A VAT breakdown (BG-23) with the VAT Category code (BT-118) "Intra-community supply" shall have a VAT exemption reason code (BT-121), meaning "Intra-community supply" or the VAT exemption reason text (BT-120) "Intra-community supply" (or the equivalent standard text in another language).

Business terms: BG-23, BT-118, BT-120, BT-121

Where this rule applies