Also called AE, autoliquidation, Reverse Charge VAT
Reverse charge is the arrangement where the buyer accounts for VAT rather than the seller. On an EN 16931 invoice it is VAT category code AE, and it comes with conditions: the rate on those lines must be zero, and the invoice must state a reason.
Lines carry category AE with a rate of 0. The VAT breakdown carries a matching AE entry, also at 0, with an exemption reason attached. The seller charges no VAT and the buyer declares it in their own return.
The reason text is free form, and something like "Reverse charge under Article 196 of Directive 2006/112/EC" is the usual shape. The standard cares that a reason is present rather than what it says.
Cross border invoices trip this constantly, and the cause is almost always the same: the seller sets the category to AE and leaves the rate at the domestic value.
That produces a line claiming the buyer will account for the VAT while also stating a VAT rate the seller is charging. The rules catch it because the two statements cannot both be true.
The second common one is setting the category correctly and omitting the exemption reason, because nothing in the accounting system prompts for it.
Every condition attached to reverse charge, with the cause and the fix.
One of the three Factur-X starters, with no VAT and a stated exemption reason.
