To offer customers a clear view of total order amount, it is recommended to always include any tax amounts in the order details shared with Klarna. To ensure that all calculations are done correctly, tax validation is offered by Klarna.
Below you can find in-depth descriptions of how this validation is done, to ensure your own validation is aligned with Klarna’s.
Based on that customer expectations and tax legislation is different in Europe, Australia and US, our recommendation of how you should report taxes to our API is different for these markets. See section below for the market-by-market recommendation.
There are two ways to implement taxes in klarna’s products. The global way of having it as a part of every single item and summarize on order level. As well as the US standard of having it as a separate item.
The global way validates taxes at order and item level.
At order level, the calculated total amount including tax must be within error tolerance value ±Items Quantity.
sum(items total tax amount) - sum(items) <= total tax amount <= ( sum(items) total tax amount sum(items)) At item level the value of calculated tax rate must be within error tolerance ±1. All item’s validation must be valid to create an order:
If the order is not valid the response will include the field or value incorrect.
The sales tax might change from the point the order is created to the time the order is shipped (ie order placed on 28th of the month, but doesn’t ship until the 3rd of the next month)
Create order with tax rate which is valid at that point
If tax rate is different (most likely lower) at the time of shipment, update the order
Most retailers don’t charge a higher tax, but rather side with the customer and only charge what’s quoted at the time of placing an order. However, (it’s a law) they do charge lesser amount if the tax is lower at the time of shipment.
Klarna does a new risk check when the order is updated. If this check fails the merchant needs to accept that he can not capture the increased tax amount.
If Klarna accepts the update, the merchant can capture the increased amount