An EIN (Employer Identification Number) is also referred to as a Federal Tax ID Number. When you do business in the U.S., you can use this number to identify your company and file taxes. If you need to apply for an EIN from outside the U.S., the process is pretty straightforward and outlined below to help get you started.
First, determine if you need an EIN
In the United States, every business is required to have an EIN. This unique number, which is issued by the federal government, is used by the IRS in order to quickly and easily identify each business for tax purposes.
Once your business has been legally registered, you can apply for an EIN, and the IRS will use your company’s EIN to track your business income taxes, as well as to receive the taxes that you are required to pay.
If you are not a U.S. citizen and you’re located outside of the United States but you’re doing business in the country, such as running an e-commerce storefront or selling on Amazon, you need to go through the appropriate steps to get your EIN and report your earnings.
If you don’t have an ITIN (Individual Taxpayer Identification Number) or SSN (Social Security Number), your EIN will be used instead. Plus, if you are importing goods into the U.S., you will need to show an EIN if you don’t already have an ITIN or SSN. This number will also help you avoid the complex forms from U.S. Customs and Border Protection.
Here are a few reasons why your business would need to file for an EIN:
- You’re operating your business as a partnership or corporation.
- Your business has employees.
- Your business withholds taxes on income that’s paid to one or more non-resident aliens.
- You have a Keogh plan, which is a retirement plan for those who are self-employed
- You file any of the following tax returns: Excise, Employment, and Alcohol, Tobacco and Firearms.
- Your business is involved in any of these types of organisations: estates, trusts, non-profit organisations, real estate mortgage investment conduits, plan administrators, and farmers’ cooperatives.
- You’re importing goods to the U.S. such as for sale on marketplaces like Amazon. Customs require an EIN when goods are valued over a certain amount or if you ship them to the U.S. by sea.
You shouldn’t have to pay to get an EIN
According to the IRS, getting an EIN for your business should come at no cost to you, as they offer the service for free. Therefore, if you come across any websites or advertisements that claim they can get you an EIN for a fee, it is best to avoid those offers and go directly through the IRS instead.
How to get an EIN from outside the U.S.
To obtain an EIN as an international applicant, you must call the IRS at 267-941-1099 and press the appropriate number from the menu to receive a foreign EIN. Just be aware that this isn’t a toll free number, and the hours of operation are from 6:00 a.m. to 11:00 p.m. Eastern Time. The office is open Monday through Friday only. Also be aware that this call could take quite a bit of time, so be sure to set aside at least an hour of uninterrupted time in your day to wait on hold and speak with a representative.
If you are going to make this call, make sure that you are authorised to get the EIN (either as the owner of the business or as a Third Party Designee who has been authorised to act on behalf of the business). You will also need to be able to answer questions related to Form SS-4, which you can get by visiting the IRS website and searching for the Application for Employer Identification Number.
Prior to the call, you should fill out the Third Party Designee section of the form if you wish to authorise someone else to receive your business’s EIN and answer the required questions on your behalf. Otherwise, you can leave that section of the form blank. Remember to fill out the signature area, as the authorisation will not be valid without it.
Form SS-4 asks questions regarding your business, including its U.S. mailing address, the type of entity that your company is, your reason for applying for an EIN, and the industry you work within. Completing these questions in advance will allow you to have the answers during your phone call, saving you time, but also be prepared for additional enquiries.
At the end of your call, you will be issued an EIN, which you can start using right away. Be sure to write the number down and keep it in a safe place, as your physical copy will come in the mail to your U.S. address a few weeks later. If you don’t have a U.S. address, ask the representative if they will mail the EIN internationally or send it via email.
Paying taxes after receiving your EIN
Once you have your EIN, you can then pay the appropriate taxes that you owe to the federal government for doing business in the United States. To do this easily from abroad, you can pay your taxes online. Keep in mind that there are tax treaties in place to prevent double taxation, but it’s still wise to speak to an international tax expert to ensure your business pays the right tax to the right jurisdiction.
After you have calculated the taxes that you owe, you can submit them via an international money transfer through OFX to save on exchange rate margins and fees.
Cancelling your EIN
Once your business has received an EIN, the IRS won’t be able to cancel it, as it will become the company’s federal taxpayer ID number indefinitely, even if you never use it to file your tax returns. Your unique EIN will never be reassigned or reused by being issued to another business entity. So if you don’t end up using your EIN in the near future, it will always be there if business picks up later on.
However, according to the IRS, if you do get an EIN but you determine later on that you don’t actually need it, the agency could close your company’s account. You would need to send the IRS a letter that contains the legal name of your business, along with its address, its EIN, and the reason you want to close the account. Before your account can be closed, you must pay all of the taxes that you owe.
Conduct business in the U.S. from abroad
Once you have your foreign EIN number, you’ll be able to conduct business in the United States even if you’re located overseas. Though this process takes time, it will be worthwhile, so go ahead and go after your entrepreneurial dreams.
For additional information and tips, check out our guide on doing business overseas.
Ready to sell more overseas? Get in touch with one of our online selling specialists who can help you take you business to the next level.