Tax categories in the e-invoice

What the category is for

The tax category (BT-118) tells the recipient's software how the VAT of the line is to be treated. It belongs with the tax rate (BT-119) and, for exemptions, with a reason (for example a reference to the law).

The most important categories

The most common codes:

• S: standard rate, normal VAT, for example 19 percent or 7 percent
• Z: zero rate, transaction at 0 percent
• E: exempt, with the exemption reason stated
• AE: reverse charge, the tax liability lies with the recipient
• K: intra-community supply to another EU country
• G: export to a country outside the EU
• O: not subject to VAT, for example outside the scope

Relation to the tax rate

The category must fit the rate: S needs a rate above zero, Z, E, AE, K, G and O require zero percent. For E, AE, K and G an exemption reason or note is needed. If the two do not fit together, the validator reports an error.

Special cases

Two cases come up often:

• Small businesses show no tax and choose the matching exemption category with the note on section 19 of the VAT Act.
• For services to businesses in other EU countries, reverse charge or an intra-community supply is right depending on the case. A short query to your tax adviser pays off here.

• Create e-invoice (XRechnung)
• Validate e-invoice

Frequently asked questions

Who determines the category?

The invoice issuer on the basis of the facts. The tool only creates what you specify.

What if several tax rates occur?

Each line gets its own category and rate. The tax totals are formed per category and rate.

Can I change the category afterwards?

Create the invoice again with the right details. Do not alter the original file.

More guides

• The most important fields of an e-invoice
• E-invoicing for small businesses
• Understanding and fixing validation messages

These guides do not replace tax or legal advice. For questions about your own case please ask your tax adviser.