# PEPPOL-EN16931-P0109: Code second-hand goods sold under the margin scheme as category E with VATEX-EU-F

`VATEX-EU-F` marks a sale under the margin scheme for second-hand goods and is accepted only in category `E`. The recorded bookcase sale was coded `O`.

- Layer: Peppol BIS Billing
- Severity: fatal (the document is invalid)
- Topics: VAT, Code lists
- Official definition: https://docs.peppol.eu/poacc/billing/3.0/rules/ubl-peppol/PEPPOL-EN16931-P0109/
- Explanation last updated: 2026-09-28

## The short answer

`PEPPOL-EN16931-P0109` fails for each `cac:TaxCategory` that carries `VATEX-EU-F` while its `cbc:ID` is not `E`. Under the margin scheme for second-hand goods the dealer accounts for VAT on its margin and shows none on the invoice; the VATEX list pairs the code with the exempt category, and Peppol enforces that pairing.

The recorded example sells a second-hand bookcase and codes the sale `O`, not subject to VAT, with the margin scheme code beside it. A margin scheme sale is within the scope of VAT, so `O` misstates it even though the invoice shows no VAT.

## What the rule checks

Each `cac:TaxCategory` whose exemption code, upper-cased, is `VATEX-EU-F` must have `E` as its category after trimming. The recorded `O` breakdown is the only finding, because the failing invoice otherwise meets category `O`: its line has no rate and its seller no VAT identifier.

Changing the letter alone is not enough. When tried, relabelling the recorded breakdown and line from `O` to `E` cleared this rule and brought `BR-48` (the breakdown needs a rate), `BR-E-02` (the seller VAT identifier) and `BR-E-05` (the line rate must be `0`).

Zero rating the sale fails as well. When tried, the corrected example with its breakdown and line set to `Z` was reported by this rule and by `BR-Z-10`, which forbids any exemption reason on a Zero rated breakdown.

The pairing is all the rule tests. When tried, `VATEX-EU-O` in place of `VATEX-EU-F` made the failing document pass every layer, which is right only if the sale really is outside the scope of VAT.

| Term | Meaning | UBL element |
|---|---|---|
| BT-121 | VAT exemption reason code | `cac:TaxTotal/cac:TaxSubtotal/cac:TaxCategory/cbc:TaxExemptionReasonCode` |
| BT-118 | VAT category code | `cac:TaxTotal/cac:TaxSubtotal/cac:TaxCategory/cbc:ID` |
| BT-31 | Seller VAT identifier | `cac:AccountingSupplierParty/cac:Party/cac:PartyTaxScheme/cbc:CompanyID` |

## How an integration ends up here

Possible causes, from the shape of the rule rather than from measured usage:

- Sales without VAT on the invoice are mapped to `O` by default, and the margin scheme flag only sets the exemption code.
- A shop or till system that handles the margin scheme has no exempt category, so margin sales go out as outside the scope or zero rated.
- The margin scheme code is taken from the stock item, while the category is taken from the customer or from the VAT total of the invoice.

## How to fix it

1. Treat a margin scheme sale as exempt in the e-invoice: category `E` on the breakdown and on each line of second-hand goods, with the rate `0` in both places, and keep `VATEX-EU-F`.
2. Give the seller VAT identifier in `cac:PartyTaxScheme`. `BR-E-02` requires a seller tax identifier on an invoice with an exempt line, and a dealer using the margin scheme is registered for VAT, so its VAT number is the one to give.
3. Show no VAT on the margin: the breakdown tax amount stays `0.00`, and the exemption code tells the buyer why.
4. Where one invoice mixes margin scheme items with normally taxed items, give each category its own breakdown.

## Before and after

These are fragments, not complete documents. The complete synthetic documents they come from are linked below.

Fragment of the failing invoice: a margin scheme sale coded not subject to VAT, O, with no rates

```xml
<cac:TaxSubtotal>
  <cbc:TaxableAmount currencyID="GBP">25.00</cbc:TaxableAmount>
  <cbc:TaxAmount currencyID="GBP">0.00</cbc:TaxAmount>
  <cac:TaxCategory>
    <cbc:ID>O</cbc:ID>
    <cbc:TaxExemptionReasonCode>VATEX-EU-F</cbc:TaxExemptionReasonCode>
    <cbc:TaxExemptionReason>Margin scheme - Second-hand goods</cbc:TaxExemptionReason>
    <cac:TaxScheme>
      <cbc:ID>VAT</cbc:ID>
    </cac:TaxScheme>
  </cac:TaxCategory>
</cac:TaxSubtotal>
<!-- totals and the start of the invoice line omitted from this fragment -->
<cac:Item>
  <cbc:Name>Second-hand bookcase</cbc:Name>
  <cac:ClassifiedTaxCategory>
    <cbc:ID>O</cbc:ID>
    <cac:TaxScheme>
      <cbc:ID>VAT</cbc:ID>
    </cac:TaxScheme>
  </cac:ClassifiedTaxCategory>
</cac:Item>
```

Fragment of the corrected invoice: the same sale in category E, with the rate 0

```xml
<cac:TaxSubtotal>
  <cbc:TaxableAmount currencyID="GBP">25.00</cbc:TaxableAmount>
  <cbc:TaxAmount currencyID="GBP">0.00</cbc:TaxAmount>
  <cac:TaxCategory>
    <cbc:ID>E</cbc:ID>
    <cbc:Percent>0</cbc:Percent>
    <cbc:TaxExemptionReasonCode>VATEX-EU-F</cbc:TaxExemptionReasonCode>
    <cbc:TaxExemptionReason>Margin scheme - Second-hand goods</cbc:TaxExemptionReason>
    <cac:TaxScheme>
      <cbc:ID>VAT</cbc:ID>
    </cac:TaxScheme>
  </cac:TaxCategory>
</cac:TaxSubtotal>
<!-- totals and the start of the invoice line omitted from this fragment -->
<cac:Item>
  <cbc:Name>Second-hand bookcase</cbc:Name>
  <cac:ClassifiedTaxCategory>
    <cbc:ID>E</cbc:ID>
    <cbc:Percent>0</cbc:Percent>
    <cac:TaxScheme>
      <cbc:ID>VAT</cbc:ID>
    </cac:TaxScheme>
  </cac:ClassifiedTaxCategory>
</cac:Item>
```

In the failing invoice the breakdown and the bookcase line are category `O` without a rate, and the seller has no VAT identifier. The corrected invoice has `E` with the rate `0` in both places and the seller VAT identifier `GB123456789`. `VATEX-EU-F` and its reason text are the same in both, and the failing document reports only this rule.

### What the validator reported

- The failing invoice reports **PEPPOL-EN16931-P0109**. The corrected document passes every layer with no findings.
  - [Download the failing XML](https://ironfang.com/finance/rule-examples/PEPPOL-EN16931-P0109-invalid.xml)
  - [Download the corrected XML](https://ironfang.com/finance/rule-examples/margin-second-hand-valid.xml)

Recorded on phive 12.1.0 / phive-rules-peppol 4.5.6 / Saxon-HE 12.10, the engine behind the free validator, using synthetic data. A recorded result is regression evidence for these documents; it is not a certification.

## Where it applies

- Applies to UBL `Invoice` and `CreditNote`. When tried, a credit note with `VATEX-EU-F` in a Zero rated breakdown reported this rule together with `BR-Z-10`.
- Reported on the Peppol layer; on the EN 16931 layer `BR-CL-22` only confirms that `VATEX-EU-F` is on the VATEX list.
- In an exempt breakdown the code needs no reason text beside it: when tried, the corrected example without its text passed every layer. Sending both, as the example does, is allowed.

## Related rules

- [PEPPOL-EN16931-P0108 applies the same pairing to VATEX-EU-D for second-hand means of transport](https://ironfang.com/docs/finance/rules/PEPPOL-EN16931-P0108.md)
- [PEPPOL-EN16931-P0111 ties the antiques margin scheme code VATEX-EU-J to category E](https://ironfang.com/docs/finance/rules/PEPPOL-EN16931-P0111.md)
- [BR-E-02 requires a seller tax identifier, which the corrected invoice gives as its VAT identifier](https://ironfang.com/docs/finance/rules/BR-E-02.md)
- [BR-Z-10 adds its own finding when a margin sale is coded Zero rated with this code](https://ironfang.com/docs/finance/rules/BR-Z-10.md)

## Scope and source

Written for Peppol BIS Billing 3.0.21 (May 2026), EN 16931 1.3.16, as applied to UBL 2.1 Invoice and CreditNote documents. Other profiles, syntaxes and releases can define this identifier differently. Guidance version 2026-09-28.1: source checked 2026-09-28, explanation last updated 2026-09-28.

[The official definition of PEPPOL-EN16931-P0109](https://docs.peppol.eu/poacc/billing/3.0/rules/ubl-peppol/PEPPOL-EN16931-P0109/) carries the normative wording and test. This page is our explanation of it, not a copy.

Guidance does not change the engine verdict. Fixing this finding does not mean the document passes every layer, and validation does not certify legal or tax compliance or transmit a document over Peppol.

## Links

- [This rule as a web page](https://ironfang.com/docs/finance/rules/PEPPOL-EN16931-P0109)
- [Free Peppol invoice validator](https://ironfang.com/tools/peppol-validator)
- [Rule index](https://ironfang.com/docs/finance/rules.md)
- [Ironfang Finance API docs](https://ironfang.com/docs/finance)
- The same rule is available to MCP clients as the tool `finance.rule.get` on https://mcp.ironfang.com/mcp