XTRM helps takes away the burden of tracking and dealing with global tax reporting.
How does XTRM manage taxes?
In order to understand how XTRM manages taxes, it is important to understand how XTRM is classified in the payments industry.
1) XTRM is what is referred to as Third Party Settlement Organization (TPSO).
The recipients of payments will typically not be employed directly by your company, but even if they are the responsibility to notify the IRS (or whichever Tax authority based on where they live) falls on the recipient. This is the case all over the world wherever we process payments. In other words, when the recipient or company submits their taxes, they have to declare 'Other income' and withholding at source is not required. Recipients can use the data on the 1099-K (USA) or equivalent transaction reports posted in their account, regardless of where they live in the world to notify their tax organization of all applicable payments.
5) Remitters (paying companies) reporting is provided in the system.
We provide the necessary reporting for any remitting company to provide to the IRS. The requirement to report depends on the country and local rules. We will take the burden or submitting those reports for certain countries based on local rules and payment threshold limits.
6) We collect all required data for the purpose of tax reporting.
To assist all companies and recipients with correctly filing their taxes for all payments sent and received, we capture all the relevant data electronically. For example, this includes electronic collection of W9 and W8-BEN or country equivalent data as well as electronic posting of 1099 K's (USA) and all transactions reports for download.