What it means
When a row of the VAT breakdown (BG-23) has the exemption reason code (BT-121) VATEX-EU-AE, which stands for reverse charge, where the buyer accounts for the VAT, its VAT category code (BT-118) must be AE, two capital letters. Any other category, such as E, Z or K, fails. The same check applies to any other cac:TaxCategory with this exemption reason code.
Why it matters
Category AE marks a reverse charge sale, where the seller leaves VAT off and the buyer accounts for it.
How to fix it
In your invoicing software, set the VAT category code that accompanies VATEX-EU-AE to AE. If the buyer does not account for the VAT, remove the reverse charge reason and use the category that fits the sale. If you build the XML yourself, set cbc:ID to AE in the same cac:TaxCategory that holds the cbc:TaxExemptionReasonCode.
Once the file is corrected, check it again for free: Validate a Peppol BIS invoice
Or fix the invoice in a form and download the corrected file, for 1 credit: Fix a rejected e-invoice
The rule as published
Read the rule on the publisher's site
Where this rule applies
| Rule set | Version |
|---|---|
| Peppol BIS Billing 3.0 (invoice) | 2026.5 |
| Peppol BIS Billing 3.0 (credit note) | 2026.5 |
Check your file
Drop your e-invoice to see whether PEPPOL-EN16931-P0107 still fails, and which other rules do.
Related rules
- PEPPOL-EN16931-P0108 Reason VATEX-EU-D needs VAT category E
- PEPPOL-EN16931-P0109 Reason VATEX-EU-F needs VAT category E
- PEPPOL-EN16931-P0110 Reason VATEX-EU-I needs VAT category E
- PEPPOL-EN16931-P0111 Reason VATEX-EU-J needs VAT category E
- PEPPOL-EN16931-P0112 Type codes 326 and 384 are only for German buyer and seller
- PEPPOL-EN16931-P0106 Reason VATEX-EU-IC needs VAT category K