CRA international payment reporting: what businesses must declare

Navigating cross-border payment reporting requirements has become increasingly complex for Canadian businesses operating internationally. With regulatory changes accelerating in 2025, companies face new thresholds, expanded documentation requirements, and stricter compliance deadlines that demand immediate attention.

The landscape shifted dramatically when the One Big Beautiful Bill Act (OBBBA) was passed into law on July 4, 2025, introducing significant changes to reporting thresholds and backup withholding requirements ¹. These changes, combined with the mandatory ISO 20022 adoption deadline of November 22, 2025, create a perfect storm of compliance challenges for businesses managing international payments ².

For Canadian businesses sending and receiving funds across borders, understanding what must be declared – and when – has never been more critical. Let's explore the essential reporting requirements, documentation standards, and compliance procedures that will keep your business on the right side of regulations.

Understanding the new reporting thresholds for 2025

The regulatory environment for international payment reporting underwent substantial changes in 2025. For payments made after December 31, 2025, the reporting threshold for Forms 1099-MISC and 1099-NEC increases from $600 to $2,000 aggregated per payee per year ¹. This threshold adjustment provides some relief for businesses managing multiple small transactions.

Simultaneously, the limited de minimis exception for Forms 1099-K has been reinstated, requiring reporting only if payments exceed both $20,000 total and 200+ transactions in a calendar year ¹. This reinstatement is retroactive to 2022, with backup withholding for 1099-K aligned with these thresholds effective for the 2025 reporting year.

These threshold changes mirror the new backup withholding requirements. If a payee fails to provide a correct TIN or triggers other withholding requirements, the threshold at which payers must begin withholding will also rise ¹. Understanding these interconnected thresholds helps businesses optimize their payment processes while maintaining compliance.

For businesses managing international wire transfers, these thresholds interact with existing cross-border payment requirements ³. Companies must track both domestic reporting thresholds and international payment documentation requirements to ensure comprehensive compliance.

Critical documentation requirements for cross-border transactions

Proper documentation forms the backbone of compliant international payment reporting. The Organisation for Economic Co-operation and Development (OECD) released three pivotal documents in June 2025 that define how jurisdictions handle the automatic exchange of CRS financial and CARF crypto-asset information ⁴. These updates represent the most significant overhaul of the Common Reporting Standard since its adoption in 2014.

Businesses must now maintain comprehensive records for various payment types. The updated CRS explicitly covers electronic money products and central bank digital currencies (CBDCs), expanding the scope of reportable transactions ⁴. Financial institutions must also report on indirect investments in crypto-assets, such as those held through derivatives or pooled investment vehicles.

The documentation burden extends beyond traditional payments. With EU DAC 8 mandating crypto-asset service providers report cross-border digital asset transactions starting January 1, 2026, businesses must prepare their documentation systems now ¹. The first reporting cycle begins in 2027, with member states required to transpose requirements by December 31, 2025.

For Canadian businesses expanding internationally, understanding these documentation requirements proves essential for successful market entry ⁵. Proper documentation not only ensures compliance but also facilitates smoother payment processing and reduces the risk of transaction delays.

ISO 20022: the new standard transforming payment reporting

By November 2025, financial institutions must be fully compliant with ISO 20022 standards for cross-border payments, replacing the MT messaging formats used on SWIFT ². This international standard introduces a common language and model for payments data, fundamentally changing how businesses report and track international transactions.

ISO 20022 supports richer payment data, including invoice and remittance details, enhanced transparency for compliance and fraud monitoring, and improved reconciliation and automation across the payment chain ². All financial institutions connected to SWIFT must send cross-border messages in ISO 20022 by November 22, 2025, with legacy MT messages no longer accepted for many critical transactions after this deadline.

Failure to comply with ISO 20022 standards by the deadline may result in rejected payments or delayed processing ². This creates urgency for businesses to update their systems and processes. Payment Service Providers must update their payment messaging infrastructure, APIs, and databases to support the new standard.

The transition affects how businesses manage their accounts receivable and payment tracking ⁶. Companies using integrated accounting systems like Xero benefit from automated updates that ensure ISO 20022 compliance ⁷.

Navigating FATCA and CRS reporting obligations

The Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) create parallel reporting obligations for businesses with international operations. FATCA and CRS data for the 2024 reporting period must be submitted by July 31, 2025, marking a critical deadline for many organizations ¹.

Starting with the 2025 reporting year, Germany will fully retire the ELSTER portal and require all FATCA and CRS files to be submitted exclusively via the new BZSt online portal ¹. This system change exemplifies the broader modernization of reporting infrastructure across jurisdictions.

The CRS Status Message XML Schema Version 3.0 introduces more granular error identification, expanded metadata, support for automated workflows, and full alignment with the 2025 CRS updates and CARF ⁴. These technical specifications enable jurisdictions to send structured feedback on CRS data submissions, improving the accuracy and efficiency of reporting.

Genuine non-profit organizations are now exempt from certain reporting obligations under the updated CRS, providing relief for charitable entities ⁴. However, commercial businesses face expanded requirements, particularly around digital assets and electronic money products.

Managing crypto-asset reporting requirements

The Crypto-Asset Reporting Framework (CARF) was introduced in 2023 to address the growing use of crypto-assets in cross-border financial activity ⁴. The 2025 updates bring significant changes that affect businesses accepting or holding digital assets.

On July 18, 2025, President Trump signed the GENIUS Act into law, establishing the first federal framework for stablecoins in the United States ¹. The act requires issuers to maintain 1:1 asset backing and imposes new transparency rules under the Bank Secrecy Act, creating additional reporting obligations for businesses using stablecoins in international transactions.

Germany launched a public consultation on its DAC8 and CARF implementing bill on July 4, 2025, requiring crypto service providers to comply with both frameworks and complete due diligence on existing users by January 1, 2027 ¹. Luxembourg's Cabinet approved similar draft laws on July 24, 2025, aligning domestic law with OECD standards.

For businesses choosing the right payment provider, understanding crypto-asset reporting capabilities becomes crucial ⁸. Providers with integrated CARF compliance features can significantly reduce the administrative burden of crypto-asset reporting.

Beneficial ownership and enhanced due diligence

FinCEN's evolving requirements for beneficial ownership information (BOI) create additional layers of reporting complexity. The Beneficial ownership rule requires identification of 25 percent or control natural persons behind legal entities ⁹. The deadline for BOI filing for domestic entities created before January 1, 2024, was extended from January 1, 2025, to March 21, 2025.

FinCEN's March 2025 interim rule suspends the domestic BOI requirement while it re-tools thresholds, but foreign entities still must file within 30 days of registration ⁹. This creates a dual-track system where international businesses face stricter requirements than domestic entities.

The Customer Due Diligence (CDD) rule, established in 2018, requires understanding the ownership structure, purpose of the account, and ongoing customer risk assessment ⁹. These requirements apply to all international payment relationships, affecting how businesses onboard partners and process transactions.

For companies managing business accounts with international capabilities, these enhanced due diligence requirements necessitate robust verification processes ¹⁰. Automated verification systems can help meet these requirements while minimizing operational friction.

Regional variations in reporting requirements

Different jurisdictions implement varying approaches to international payment reporting. Russia implemented significant changes to its financial transfer regulations on May 30, 2025, marking the most significant overhaul since 2014 ¹¹. The new measures include mandatory source verification for all foreign transfers and transfer limits tied to identification levels.

The Bahamas published a notice on July 11, 2025, requiring Reporting Financial Institutions to report undocumented accounts effective immediately ¹. This immediate implementation demonstrates how quickly reporting requirements can change across jurisdictions.

Ireland updated its Filing Guidelines for DAC2-Common Reporting Standard Part 38-03-26, incorporating the OECD's CRS XML Schema Version 3.0 and User Guide 4.0, which will come into effect January 1, 2027 ¹. These updates require businesses to adapt their reporting systems to accommodate new technical specifications.

For e-commerce businesses navigating trade realities, understanding these regional variations proves essential ¹². Each market presents unique reporting challenges that must be addressed to maintain compliant operations.

Technology solutions for automated reporting

Open banking APIs save costs, increase transparency, and quicken payments across borders while potentially increasing transparency in the global payments system by 20-30%, according to McKinsey ¹³. These technologies enable automated data collection and reporting that simplifies compliance.

Open banking may reduce transaction costs by up to 10% and shorten transfer times from days to just minutes, according to Accenture research ¹³. This efficiency extends to reporting processes, where automated systems can compile and submit required documentation without manual intervention.

However, more than half of financial institutions consider security and data privacy to be the biggest obstacles to adopting open banking, according to Deloitte ¹³. Additionally, 43% of banks have problems with technological integration when implementing open banking systems, according to a PwC report.

Expense management software tools can help businesses track and report international payments more effectively ¹⁴. These systems automatically categorize transactions, maintain audit trails, and generate reports that meet regulatory requirements.

Preparing for future reporting changes

The regulatory landscape continues to evolve rapidly. While some changes introduced by the OECD updates won't be mandatory until reporting in 2027, many jurisdictions will require collection in 2026 ⁴. Early adoption can reduce risk and improve operational readiness.

The States of Guernsey Revenue Service published Compliance Information Notice 2025/1, noting that a legal framework is currently being drafted to implement CARF into Guernsey law, with additional functionality to be added to IGOR in readiness for the first reporting schedule date of June 2027 ¹.

Businesses must also prepare for the convergence of traditional and digital payment reporting. The introduction of status message schemas for both CARF and CRS reflects a broader push toward data integrity ⁴. These updates give tax authorities the tools they need to identify non-compliance, enforce reporting obligations, and close loopholes that previously allowed certain assets to go unreported.

Companies can simplify their expense processes to better prepare for these changes ¹⁵. Streamlined processes make it easier to adapt to new reporting requirements as they emerge.

Best practices for maintaining compliance

Successful compliance requires a systematic approach to international payment reporting. Start by establishing clear documentation protocols that capture all required information at the point of transaction. This proactive approach prevents scrambling for information during reporting deadlines.

Implement regular compliance audits to identify gaps in your reporting processes. These audits should examine both technical compliance with reporting standards and the accuracy of submitted data. Early detection of issues allows for correction before regulatory scrutiny.

Train your team on evolving requirements. Compliance teams must be trained on the new requirements, especially around crypto-assets and digital currencies ⁴. Regular training ensures your organization stays current with changing regulations.

Consider partnering with technology providers that specialize in compliance automation. When comparing providers like Wise vs Airwallex, evaluate their reporting capabilities and compliance features ¹⁶. The right partner can significantly reduce your compliance burden while ensuring accuracy.

Conclusion

International payment reporting requirements have reached unprecedented complexity in 2025. From the new ISO 20022 standard to expanded crypto-asset reporting under CARF, businesses face multiple overlapping compliance obligations that demand sophisticated approaches to documentation and reporting.

The key to successful compliance lies in understanding the interconnected nature of these requirements. The threshold changes introduced by the OBBBA, the technical specifications of CRS 3.0, and the mandatory adoption of ISO 20022 all work together to create a comprehensive reporting framework that leaves little room for error.

Early adopters of ISO 20022 stand to gain competitive advantages ². By investing in automated reporting systems and maintaining robust documentation practices, businesses can transform compliance from a burden into a competitive advantage. The organizations that master these requirements today will be best positioned to capitalize on international opportunities tomorrow.

FAQ

What are the new CRA international payment reporting thresholds for 2025?

Following the One Big Beautiful Bill Act (OBBBA) passed on July 4, 2025, Canadian businesses face updated reporting requirements with stricter compliance deadlines. The new regulations include enhanced documentation requirements and expanded thresholds that require immediate attention from companies operating internationally.

How does ISO 20022 compliance affect cross-border payment reporting?

By November 2025, financial institutions must be fully compliant with ISO 20022 standards for cross-border payments, replacing MT messaging formats on SWIFT. This standard introduces richer payment data, enhanced transparency for compliance monitoring, and improved reconciliation across the payment chain, making CRA reporting more detailed and automated.

What FATCA and CRS obligations do Canadian businesses have for international payments?

The OECD released three pivotal documents in June 2025 defining how jurisdictions handle automatic exchange of CRS financial and CARF crypto-asset information. Canadian businesses must comply with both FATCA reporting to the IRS and Common Reporting Standard requirements, including the new Crypto-Asset Reporting Framework introduced in 2023.

How can payment platforms help automate CRA compliance reporting?

Modern payment providers like Airwallex offer automated compliance solutions that streamline international payment reporting. These platforms integrate with expense management software tools and provide comprehensive payment processing that automatically captures required data for CRA reporting, reducing manual compliance burdens for Canadian businesses.

What documentation is required for cross-border payment compliance in 2025?

The new regulations require mandatory source verification for all foreign transfers, enhanced KYC documentation following FinCEN's 2025 rule changes, and detailed transaction records meeting ISO 20022 standards. Businesses must maintain comprehensive records of payment purposes, beneficiary information, and compliance with anti-money laundering requirements.

How do the 2025 regulatory changes impact small and medium Canadian businesses?

Small and medium businesses face increased compliance complexity with the new CRA reporting requirements and ISO 20022 standards. However, choosing the right payment provider with built-in compliance features can significantly reduce the administrative burden while ensuring full regulatory compliance for international transactions.

Citations

1. https://www.complyexchange.com/post/the-latest-irs-fatca-and-crs-news-for-july-2025

2. https://segpay.com/blog/iso-20022-the-new-cross-border-payments-standard/

3. https://www.airwallex.com/ca/blog/how-international-wire-transfers-work

4. https://www.taina.tech/resources-news-and-awards/oecd-crs-and-carf-2025-updates-ushering-in-a-new-era-of-global-tax-transparency

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9. https://www.datazoo.com/fincen-kyc-rule-changes-2025

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11. https://www.americancrimea.site/p/russias-new-money-rules-what-expats

12. https://www.airwallex.com/ca/blog/ecommerce-businesses-navigate-trade-realities

13. https://bankquality.com/blog/the-future-of-open-banking-and-cross-border-payments/

14. https://www.airwallex.com/ca/blog/expense-management-software-tools

15. https://www.airwallex.com/ca/blog/simplify-company-expense-process

16. https://www.airwallex.com/ca/blog/comparison-wise-vs-airwallex