UBL-CR-172: The seller's tax details should not include an exemption reason

What it means

UBL lets the tax details of a party carry a text that explains why the party is exempt from VAT. EN 16931 does not read it there. The reason for an exemption belongs to a VAT category in the VAT breakdown (BG-23), as text (BT-120) or as a code (BT-121). This rule fails whenever cbc:ExemptionReason is present in the seller's tax details.

Why it matters

This rule is a warning, so the invoice is still accepted. The recipient's software looks for the reason in the VAT breakdown and ignores it in the seller's details. It is worth fixing when the invoice is exempt from VAT, because the buyer and the tax authority need the reason where the standard puts it.

How to fix it

In your invoicing software, enter the exemption reason on the VAT category, for example next to the exempt line or in the VAT notes of the invoice, not in your company profile. If you build the XML yourself, delete cbc:ExemptionReason from cac:AccountingSupplierParty/cac:Party/cac:PartyTaxScheme. Then put the text in cbc:TaxExemptionReason under cac:TaxTotal/cac:TaxSubtotal/cac:TaxCategory.

The rule as published

A UBL invoice should not include the AccountingSupplierParty Party PartyTaxScheme ExemptionReason

Where this rule applies