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VAT handling on Kustom settlements

This article explains the most common reasons VAT may look different than expected and what to check.

Updated over 2 weeks ago

Consumer VAT

Consumer VAT is included in transaction data and shown in reporting and settlement details. VAT data in Kustom reporting is based on data you as a Merchant are sending to Kustom.

Missing consumer VAT

If Consumer VAT is missing or looks incorrect, it’s usually due to an incorrect setup where VAT details aren’t included in the transaction data.

  • Verify that your platform or integration includes the necessary VAT details in the API request when creating orders.

  • Ensure that the following fields are correctly populated:

    • order_amount (including VAT)

    • order_tax_amount

    • Per-line tax_rate


VAT on Kustom fees

VAT can be applied to fees because the fee is treated as a taxable service. In many cases, VAT rules require VAT to be charged on service or processing fees.

VAT totals don’t match the exact expected percentage

VAT is calculated individually for each transaction or item line and rounded to two decimal places before being summed. As a result:

  • The total VAT may slightly exceed the expected percentage (e.g., 25%) when compared against the subtotal.

  • This difference is due to rounding and is not indicative of an error in the system.

Similarly, VAT on fees is calculated per fee line and rounded before summing. This process can lead to slight variances when compared to taking 25% of the aggregated fee total.


VAT/TAX column in settlement reports

The VAT/TAX column in settlement reports shows the VAT charged by Kustom to the merchant (for example, VAT on fees). It does not show consumer VAT, even if “Applied consumer VAT” appears in the transaction description.

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