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`BR-AE-01`:Reverse charge requires reason

When using VAT category AE (reverse charge), the reason must be stated.

Why This Error Matters

Invoice will be rejected by validation. Reverse charge invoices require proper VAT breakdown for tax compliance and buyer's VAT self-assessment.

How to Fix It

Verify applicability

AE is for domestic or intra-EU reverse charge

Add reason code

VATEX-EU-AE for intra-EU B2B services

Add text

Reverse charge - buyer is liable for VAT

Code Example

<cac:TaxCategory>
  <cbc:ID>AE</cbc:ID>
  <cbc:TaxExemptionReasonCode>VATEX-EU-AE</cbc:TaxExemptionReasonCode>
  <cbc:TaxExemptionReason>Reverse charge - VAT due by buyer under Article 194</cbc:TaxExemptionReason>
  <cac:TaxScheme>
    <cbc:ID>VAT</cbc:ID>
  </cac:TaxScheme>
</cac:TaxCategory>

Technical Details

XPath: /Invoice/cac:TaxTotal/cac:TaxSubtotal/cac:TaxCategory[cbc:ID="AE"]

Common Causes

Line items marked as reverse charge but VAT breakdown missing reverse charge category
VAT breakdown not generated for reverse charge transactions
ERP does not auto-create reverse charge VAT breakdown entry
Manual invoice creation missed VAT breakdown requirement
Multiple reverse charge entries instead of exactly one

Commonly Seen In

All invoicing software

Frequently Asked Questions

When using VAT category AE (reverse charge), the reason must be stated.

Add reverse charge exemption reason code. You can also use Invoice Navigator's automatic Fixer tool to correct this instantly.

Yes, BR-AE-01 is a critical error that will cause invoice rejection. It must be fixed before submission to ensure your invoice is accepted by the recipient's system.

Many instances of BR-AE-01 can be automatically corrected using Invoice Navigator's Fixer tool. Upload your invoice and the tool will identify and fix common issues, including reverse charge requires reason.

BR-AE-01 is commonly seen in exports from All invoicing software. These software packages sometimes generate invoices that need adjustment to meet full compliance standards.

Related Errors

BR-E-01

VAT exemption requires reason

BR-Z-01

Zero VAT rate requires exemption reason

Last updated: 16 January 2026

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BR-AE-01:Reverse charge requires reason