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E-invoice error explained

BR-Z: Zero rated (category Z) is inconsistent

Category Z means taxable supplies at a rate of 0 %, in Germany for example solar installations under § 12 Abs.

What the rule checks

Category Z means taxable supplies at a rate of 0 %, in Germany for example solar installations under § 12 Abs. 3 of the VAT Act. Rules BR-Z-01 to BR-Z-10 check: exactly one Z row in the breakdown, the seller's VAT ID or tax number, rate 0, a matching taxable amount and tax amount 0. Unlike exempt supplies (E), there must be no exemption reason (BR-Z-10).

Official rule text

BR-Z-01: An Invoice that contains an Invoice line (BG-25), a Document level allowance (BG-20) or a Document level charge (BG-21) where the VAT category code (BT-151, BT-95 or BT-102) is "Zero rated" shall contain in the VAT breakdown (BG-23) exactly one VAT category code (BT-118) equal with "Zero rated".
BR-Z-02: An Invoice that contains an Invoice line where the Invoiced item VAT category code (BT-151) is "Zero rated" shall contain the Seller VAT Identifier (BT-31), the Seller tax registration identifier (BT-32) and/or the Seller tax representative VAT identifier (BT-63).
BR-Z-03: An Invoice that contains a Document level allowance (BG-20) where the Document level allowance VAT category code (BT-95) is "Zero rated" shall contain the Seller VAT Identifier (BT-31), the Seller tax registration identifier (BT-32) and/or the Seller tax representative VAT identifier (BT-63).
BR-Z-04: An Invoice that contains a Document level charge where the Document level charge VAT category code (BT-102) is "Zero rated" shall contain the Seller VAT Identifier (BT-31), the Seller tax registration identifier (BT-32) and/or the Seller tax representative VAT identifier (BT-63).
BR-Z-05: In an Invoice line (BG-25) where the Invoiced item VAT category code (BT-151) is "Zero rated" the Invoiced item VAT rate (BT-152) shall be 0 (zero).
BR-Z-06: In a Document level allowance (BG-20) where the Document level allowance VAT category code (BT-95) is "Zero rated" the Document level allowance VAT rate (BT-96) shall be 0 (zero).
BR-Z-07: In a Document level charge (BG-21) where the Document level charge VAT category code (BT-102) is "Zero rated" the Document level charge VAT rate (BT-103) shall be 0 (zero).
BR-Z-08: In a VAT breakdown (BG-23) where VAT category code (BT-118) is "Zero rated" the VAT category taxable amount (BT-116) shall equal the sum of Invoice line net amount (BT-131) minus the sum of Document level allowance amounts (BT-92) plus the sum of Document level charge amounts (BT-99) where the VAT category codes (BT-151, BT-95, BT-102) are "Zero rated".
BR-Z-09: The VAT category tax amount (BT-117) in a VAT breakdown (BG-23) where VAT category code (BT-118) is "Zero rated" shall equal 0 (zero).
BR-Z-10: A VAT Breakdown (BG-23) with VAT Category code (BT-118) "Zero rated" shall not have a VAT exemption reason code (BT-121) or VAT exemption reason text (BT-120).

Source: KoSIT configuration XRechnung 3.0.2 (31 Jan 2026).

Typical causes

  • Z was used for exempt supplies, so an exemption text was added (BR-Z-10). Exempt is category E.
  • Neither the seller's VAT ID nor tax number is given (BR-Z-02 to BR-Z-04).
  • Lines with Z carry a rate above 0 (BR-Z-05).
  • The taxable amount of the Z row does not match the sum of the Z lines (BR-Z-08).

How to fix it

Use Z only for genuine 0 % supplies. Set ram:RateApplicablePercent 0 and ram:CalculatedAmount 0.00, and leave out ram:ExemptionReason and ram:ExemptionReasonCode. Give the seller's VAT ID or tax number. For exempt supplies use E with an exemption reason. Clarify with your tax adviser which category applies.

Example

Wrong (CII)

<ram:ApplicableTradeTax>
  <ram:CalculatedAmount>0.00</ram:CalculatedAmount>
  <ram:TypeCode>VAT</ram:TypeCode>
  <ram:ExemptionReason>Steuerfrei</ram:ExemptionReason>
  <ram:BasisAmount>1000.00</ram:BasisAmount>
  <ram:CategoryCode>Z</ram:CategoryCode>
  <ram:RateApplicablePercent>0</ram:RateApplicablePercent>
</ram:ApplicableTradeTax>

Right (CII)

<ram:ApplicableTradeTax>
  <ram:CalculatedAmount>0.00</ram:CalculatedAmount>
  <ram:TypeCode>VAT</ram:TypeCode>
  <ram:BasisAmount>1000.00</ram:BasisAmount>
  <ram:CategoryCode>Z</ram:CategoryCode>
  <ram:RateApplicablePercent>0</ram:RateApplicablePercent>
</ram:ApplicableTradeTax>

In Dynamics 365, Business Central and Finance

Sales / Project Operations: Sales and Project Operations have no e-invoice output out of the box. In the WBS Invoice Accelerator for Dynamics 365 the VAT rate record (Configuration > VAT Tax Rates) controls the category: VAT category (EN 16931), Percentage, Footer text and VAT exemption reason code. Each line uses its own rate (VAT Tax Rate (Line)), otherwise the invoice's VAT tax rate. For category Z leave Footer text and VAT exemption reason code on the rate empty.

Business Central: In the VAT Posting Setup the combination needs VAT % 0 and Z in the Tax Category field.

Finance: Enter Z for the sales tax code under Sales tax codes > External codes.

Related error codes

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