Wrong tax calculation when paying with PayPal after 1.8 update

Question

I originally posted this question on the Magento forums, but didn't get an answer there for three days.

Since updating to 1.8 CE, some orders get marked as “Suspected Fraud” because Magento's and PayPal's grand totals don’t match.

Here’s an example: The customer ordered one item the costs 10 euros, including 20% tax. The shipping fee is 5.50 euros, including 20% tax. Everything’s fine on the Magento side: it displays:

• Subtotal € 10
• Shipping & Handling € 5.50
• Grad total excl. tax € 12.92
• Total tax € 2.58
• Grand total incl. tax € 15.50

But PayPal receives this a little differently:

• Just one item, even though “Admin > System > Configuration > Sales > Payment Methods > PayPal Payment solutions > Website Payments Standard > Advanced Settings > Transfer Cart Line Items” is set to “Yes”
• The one item shows a price of € 12.92, which is fine - it’t the item’s price plush shipping without the tax.
• It then adds the shipping a second time, in a separate “Shipping” line, with a price of € 4.58
• The Grand total is € 20,08

Magento’s and PayPal’s grand totals don’t match up and so I get the “Suspected Fraud” order status.

What I’ve observed so far:

• It only happens if the customer is paying via PayPal
• It only happens if the customer is from Austria (the shop is Austrian too)
• I’ve selected “Transfer Cart Line Items”, but they aren’t transferred
• I’m 99% sure this didn’t happen before the 1.8 update

These are my tax settings:

Calculation Settings

• Tax Calculation Method Based On Total
• Tax Calculation Based On Shipping Address
• Catalog Prices Including Tax
• Shipping Prices Excluding Tax
• Apply Customer Tax After Discount
• Apply Discount On Prices Excluding Tax
• Apply Tax On Custom price if available

Default Tax Destination Calculation

• Default Country Austria
• Default Post Code *

Price Display Settings

• Display Product Prices In Catalog Including Tax
• Display Shipping Prices Including Tax

Shopping Cart Display Settings / Orders, Invoices, Credit Memos Display Settings

• Display Prices Including Tax
• Display Subtotal Including Tax
• Display Shipping Amount Including Tax
• Include Tax In Grand Total Yes
• Display Full Tax Summary Yes
• Display Zero Tax Subtotal No

Fixed Product Taxes

• Enable FPT No

Please let me know if you need any additional details.

Thanks!

Answer 1

We found that gremlin during our regression on EE 1.13.0 / CE 1.8.0 and are juggling prioritization with other issues. Quick work around is to send summary info rather than line item to Paypal and it'll work like a champ.

Answer 2

I have tested the most recent Release of Magento CE 1.8.1 in my staging area: This problem does not occur for me anymore, you should also try updating.

The changelog says there were a lot of fixes regarding tax calculation issues.

However be careful when upgrading (1.8.1) via Magento Downloader: For me it deleted some adminhtml templates. And be sure that any overridden templates are still working before deploying it.

Answer 3

Updating to 1.8.1.0 is not a solution! Although they claim to have fixed the bug, it is actually still at large - recommended tax settings as described in the wiki will not change this.

UPDATE: After reapplying this fix https://stackoverflow.com/questions/11868985/magento-paypal-tax-rounding-issue#answer-14562319 on my 1.8.1.0 install and setting transfer cart line items to No, I have had no more paypal errors.

Answer 4

We had the problem for ages. The thing is the rounding differences because paypal is caluculating with 2 digits and Magento with 4. You need to have an extension that is checking the differencies before redirecting to paypal. You either do it yourself or use an extension that is able to do it like this one: http://www.sellxed.com/shop/en/magento-paypal-zahlungs-extension.html

Answer 5

The thing is, the problem generally arises only if the amount of the ordered article gets bigger because only then rounding differencies between PayPal and Magento become apparent.

The Module is a API Integration of PayPal. As far as I can tell what they do is they calculate the taxes in Magento and at the same time they calculate it with two digits as PayPal does it and compare it. Rouding differencies will then be transmitted to PayPal. If you ask me thats a nice way to do it and it solved the problems for me.