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Test

Before going live, use your sandbox environment to thoroughly test the tax reporting integration. Your testing should involve:

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1. Report generation

  • Threshold testing: Create merchants with transactions totaling exactly $600, $599, and $601.
  • KYC status: Test merchants with completed KYC, pending KYC, and revoked KYC.
  • Multiple tax years: Generate transactions across different calendar years.

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2. Webhooks and notifications

  • Webhook setup: Configure and validate webhook endpoints.
  • Event testing: Test webhook delivery for TAXES.REPORTS.GENERATED events (both regular and corrected reports).
  • Webhook reliability: Test retry mechanisms and failure handling.

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3. Reportable accounts

  • Retrieve account data: Test retrieving reportable account details with the fields query parameter.
  • Update account data: Test PATCH operations to update account profile, aggregated transactions, and tax properties.
  • Editable status: Verify that the API rejects updates when tax_data.editable is false.

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4. Corrections

  • Quick corrections: Submit quick correction requests after KYC updates.
  • Status tracking: Poll correction status endpoints.

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Go live

  1. Contact your PayPal account manager to enable Tax Reporting as a Service for your live account.
  2. Move your app to production.
  3. Configure webhook endpoints for the live environment to receive tax report notifications.
  4. Update your API credentials to use live environment values.