Key takeaways
- A VATEX code states, in machine-readable form, why a transaction is exempt from VAT or why no VAT is charged.
- It feeds the "VAT exemption reason code" field (BT-121) of the EN 16931 standard, alongside the VAT category (BT-118).
- As soon as an invoice carries a category with no positive rate (exempt, reverse charge, intra-community, export, out of scope), an exemption reason is required.
- The VATEX list is published by the European Commission and often points to an article of Directive 2006/112/EC.
VATEX codes: the reason for an exemption in machine-readable form
On a paper invoice or a PDF, when no VAT is due, the seller adds a sentence: "Reverse charge", "Exempt, article 44 of the VAT Code", "Exempt intra-community supply". A human reader understands it. Software does not reliably read free text. That is the problem VATEX codes solve: they express that exemption reason in a standardised form that a program interprets without ambiguity.
VATEX is the name of the VAT exemption reason code list used in the European e-invoice. Each code says, in a standard way, why the line carries no rate: because it is exempt, under reverse charge, intra-community, exported outside the Union, or outside the scope of VAT.
The stake is concrete in Belgium. With structured B2B e-invoicing, your invoice is no longer a document re-read by eye: it is a file the customer's software processes automatically. For the foundations of the structured invoice, read The EN 16931 standard and Peppol BIS Billing 3.0.
VAT category and VATEX code: two different fields
EN 16931 clearly separates two pieces of information, both attached to the invoice's VAT breakdown. The first is the VAT category (business term BT-118): it classifies the transaction. The second is the exemption reason, which exists in two complementary forms: free text (BT-120) and, above all, a VATEX code (BT-121) that carries the same meaning in structured form.
The VAT categories of the European e-invoice form a standardised subset (the UNCL5305 list). The most common ones are below.
| Category code | Meaning | Exemption reason expected | |
|---|---|---|---|
| S | Standard rated | No | |
| Z | Zero rated | No | |
| E | Exempt from VAT | Yes | |
| AE | Reverse charge | Yes | |
| K | Intra-community supply | Yes | |
| G | Export outside the EU | Yes | |
| O | Not subject to VAT | Yes |
The distinction matters because the two fields must stay consistent. An automated check rejects an invoice whose category announces a reverse charge but whose reason points to an export. The VATEX code is therefore not decorative: it locks the meaning of the transaction.
When a VATEX code becomes mandatory
The rule is easy to remember: as soon as a line falls under a category with no positive VAT rate, EN 16931 requires an exemption reason. The standard leaves the form open: a VATEX code (BT-121) or an exemption text (BT-120) satisfies the rule. In practice the code is preferable, because only it is machine-readable by the recipient and by the tax authority.
The situations that trigger an exemption reason
Exemption (category E)
Transaction exempt under the VAT Code or the directive, for instance certain medical or educational services.
Reverse charge (category AE)
VAT is due by the customer, not the seller: construction work between taxable persons, in particular.
Intra-community supply (category K)
Sale of goods to a taxable person in another Member State, exempt in the country of departure.
Export outside the EU (category G)
Goods shipped outside the European Union.
Out of scope (category O)
Transaction that falls outside the scope of VAT.
For two of these cases, common in Belgium, see VAT reverse charge in Belgium and Intra-community VAT.
Which VATEX code for which VAT category
On the Peppol network, consistency between the category and the VATEX code is not a recommendation: it is a validation rule. Certain categories require a specific family of codes. The table below sets out the most structuring correspondences.
| VAT category | Expected VATEX code(s) | |
|---|---|---|
| G — Export outside the EU | VATEX-EU-G | |
| O — Not subject to VAT | VATEX-EU-O | |
| K — Intra-community supply | VATEX-EU-IC | |
| AE — Reverse charge | VATEX-EU-AE | |
| E — Exempt from VAT | VATEX-EU-132 (art. 132), VATEX-EU-D, and others |
For category E (exempt) the choice is wider, because exemptions cover varied situations. This is where the codes pointing directly to the directive earn their place.
VATEX codes and the articles of Directive 2006/112/EC
The VATEX list is published and maintained by the European Commission, under the Digital Europe programme that governs the code lists for European electronic invoicing. It is revised on a six-month cycle. The list combines two families of codes: those naming an article of Directive 2006/112/EC (the EU reference text for VAT) and those pointing to Member-State-specific legislation.
The "directive" codes follow a readable logic: VATEX-EU-132 targets the exemptions of article 132 of the directive (activities in the public interest), and finer variants exist, such as VATEX-EU-132-1A for public postal services. This structure lets the issuer pinpoint the exact legal basis of the exemption, and lets the recipient and the authority recognise it without interpretation.
reason code field
the EN 16931 field VATEX feeds
categories concerned
E, AE, K, G and O
directive referenced
the VAT basis of the "directive" codes
Compliant exempt invoices, without handling VATEX codes
YouInv picks the right VAT category and a consistent VATEX code from your situation, then validates the invoice before sending it over Peppol.
What this changes for your invoicing
The good news matches the other building blocks of the structured invoice: you do not have to memorise the codes. Compliant software derives the VAT category and the VATEX code from the situation you describe, then checks their consistency before sending. An export invoice with no reason, or a mis-coded reverse charge, is rejected before it even leaves.
What changes is the criterion for choosing a tool. In B2B, an exemption note written out in full in a PDF is no longer enough: your software must be able to translate that note into a valid VAT category and VATEX code. This is a point to check now, just like the ability to issue and receive documents in the right format.
Further reading
- The EN 16931 standard: the semantic model where the BT-118, BT-120 and BT-121 fields live.
- VAT reverse charge in Belgium: the most frequent use case of category AE.
- Mandatory invoice particulars in Belgium: where the exemption note belongs.
The reference source prevails: the Peppol BIS Billing 3.0 documentation on the exemption reason and the code lists for electronic invoicing published by the European Commission.
What is a VATEX code?
A VATEX code is a standardised code that states, on an e-invoice, why a transaction is exempt from VAT or why no VAT is charged. It feeds the "VAT exemption reason code" field (BT-121) of the EN 16931 standard, so the reason can be read automatically by the recipient's software.
When must a VATEX code appear on an invoice?
Whenever a line falls under a VAT category with no positive rate: exempt (E), reverse charge (AE), intra-community supply (K), export outside the EU (G) or not subject to VAT (O). For these categories EN 16931 requires an exemption reason, given either as a VATEX code (BT-121) or as free text (BT-120).
What is the difference between the VAT category and the VATEX code?
The VAT category (BT-118) classifies the transaction: standard, exempt, reverse charge, intra-community, export, out of scope. The VATEX code (BT-121) states the legal reason for the missing rate, often by pointing to an article of Directive 2006/112/EC. The two fields are distinct and must stay consistent.
Who publishes the VATEX code list?
The VATEX list is published and maintained by the European Commission, under the Digital Europe programme that governs the code lists for European electronic invoicing (EN 16931). It is updated on a six-month publication cycle.
Do you need to know VATEX codes by heart to invoice?
No. Compliant invoicing software picks the right VATEX code from the VAT category you choose and checks that the two are consistent. You reason in business situations (intra-community sale, reverse charge), not in codes.
