Supplier payments regulatory and OFAC compliance

Tax and Regulatory Compliance

Tipalti provides automated tools to help the payer meet tax requirements and compliance with “black-lists” to avoid payments to unauthorized entities.

Tax Compliance

All supplier payees are required to fill out tax forms as part of their self-registration on the Tipalti portal.

  • For US entities, a W-9 (Request for Taxpayer Identification Number and Certification) is required.
  • Non-US entities are required to complete a declaration stating that they are not a “US Person” as per the IRS definitions and are asked to submit the necessary W-8 paperwork.
  • For international companies using Tipalti, and in particular Europe, VAT ID support is available.

A premium Tipalti service, approved by auditing firm KPMG, includes the ability to walk payees through a guided tax form selection process. This includes the ability to digitally submit a W-9, W-8BEN, and W-8BEN-E. Tipalti also provides TIN validation on Social Security Numbers and Employer Identification Numbers. For other forms, such as W-8EXP, W-8IMY, W-8ECI, W-4 and Form 8233, a download link is provided as well as the ability to upload a document. This automated process is designed to streamline compliance with the FATCA (Foreign Account Tax Compliance Act) as part of the 2010 Hiring Incentives to Restore Employment (“HIRE”) Act.

Depending on the payee’s country and company structure, Tipalti can also establish the necessary tax withholding.

Tipalti also generates an end of year filing report to submit to the Internal Revenue Service that includes data to generate 1099 and 1042-S tax forms.

OFAC, AML, Anti-Terror, Anti-Narcotics compliance

Tipalti automatically scans all supplier payee records before executing every payment cycle. This ensures that every payment is checked for legitimacy and legality. Among the databases scanned are the US Treasury Department’s Office of Foreign Assets Control (OFAC) SDN (Specially Designated Nationals) List. These are known bad actors and sanctioned entities that are involved in terrorism, money laundering, arms dealing, drug traffickers, and cyberterrorists.

In addition, Tipalti maintains an internal risk network that payees are also checked against which include reportedly bad accounts based on the experience of our customers.