Manage vendor tax compliance determinations when paying US and foreign vendors
The increased IRS audit focus on payments made to US and foreign vendors, along with significant recent uplifts in information reporting penalties, have made it more critical than ever for companies to have effective compliance procedures in place.
Vendor Tax Solutions from IHS Markit provides web-based tools used by accounts payable and tax departments to allow vendors to complete an online interview and provide information about the products and services they provide.
Rather than requiring staff to manually determine and capture vendor tax information, our solution translates vendor domicile along with products and services information into a straightforward tax form requirement for the vendor, so accounts payable teams can focus on their core business functions.
Our solutions allow you to automate your vendor tax determinations required for vendor tax due diligence, withholding and reporting obligations.
- Compatibility – Integrate our Vendor Tax Portal tool with a vendor onboarding platform or ERP to create seamless flow of data and process for onboarding and re-certifying vendors. The tool comes with MD3® and Digital W-8® electronic form certification functionality, enabling pre-population of various form fields and an end-to-end tax determination for vendors
- Efficiency – Minimize time, effort and unnecessary correspondence between your accounts payable department and your vendors; reduce judgment calls for accounts payable professionals who are not subject matter experts; and manage vendor expectations for both information submission and year-end reporting requirements
- Protection – Maintain an automated audit trail for documenting foreign-source or non-FDAP payments to foreign vendors and make determinations upfront on vendor documentation so that the income-sourcing determination is collected upfront, not solely based on invoice information and pressured by strict payment timing terms
- Change management – Enables withholding agents to use the most recent tax rules and regulations in your certification and validation processes
- Regulatory compliance – Distinguish between FATCA and non-FATCA payments while automatically directing vendors to complete the full FATCA certification on a Form W-8 for FATCA payments or the substitute Forms W-8 for non-FATCA payments