One question that often comes up is "is withholding required?
Simply - the answer is no. Since XTRM is a third party settlement organization (TPSO), we sit between you and the sender. We provide a breakdown of all your transactions so that you can submit with your tax return, regardless of your location in the world.
What is a third party settlement organization (TPSO)?
A third party settlement organization is the central organization that has the contractual obligation to make payments to participating payees in a third party payment network.
Characteristics of a third party payment network include:
- The existence of a central organization with whom a substantial number of providers of goods and services (who are unrelated to the central organization) have established accounts
- an agreement between the central organization and the providers to settle transactions between the providers and purchasers
- the establishment of standards and mechanisms for settling such transactions, and
- the guarantee of payment in settlement of such transactions.
What do we tell our customers and partners?
If you are processing payments on behalf of your own customers or partners, they should be informed that it is the responsibility of the beneficiary of all payments, regardless of whether they are an individual or a company, to report any and all income to their local tax authority in the usual manner. It is nothing more than them submitting the data and documents we provide them on the site.