What is the Foreign Tax Identification Number?

If you are a resident or non-resident alien in the United States, you may have to pay taxes for having carried out gainful activities in the country. If so, then you will have to have an individual tax identification number (ITIN) to be able to do the taxes. However, there is a difference between the ITIN of any US citizen and the FTIN (Foreign Tax Identification Number) of a foreigner. Next we will see what the difference is and how you have to do to pay your taxes correctly, if it is your responsibility to do so.

What is the Foreign Tax Identification Number?

What is the difference between an ITIN and an FTIN?

What is an ITIN?

As we mentioned, the ITIN (Individual Taxpayer Identification Number) is a 9-digit number with the format XXX-XX-XXXX and is used by the IRS (Internal Revenue Service) to process payment and information related to federal taxes. The ITIN always starts with the number 9 and has a number 7 or 8 in the fourth digit. For example: 9XX-7X-XXXX or 9XX-8X-XXXX.

With an ITIN, people in the United States can pay taxes, apply for tax refunds or tax credits. Equally useful is the social security number (SSN or Social Security Number) with which you can apply for credit cards, loans and carry out almost any federal government procedure.

If you want to know how to change your ITIN for an SSN, be sure to read our guide: How to change my ITIN for my SSN.

What is an FTIN?

The Foreign Tax Identification Number is simply the tax identification number of a foreign person. This number is not issued by the IRS but by the collecting entity of the individual’s country of origin. The FTIN must be included on IRS tax-related documents and tax benefits.

If you are not a US taxpayer, you must report this to the IRS by completing Form W-8BEN every three years. This way, you won’t be held back from any interest you’ve earned.

As of January 1, 2018, The United States Internal Revenue Service (IRS) requires Form W-8BEN to include your foreign tax identification number (foreign TIN). Otherwise, the form will not be considered complete. Remember that your foreign tax identification number is issued by your country of permanent residence.

If you are unable to provide a foreign TIN, you must also complete the “Explanation of Lack of Foreign Tax Identification Number” form. Here are examples of explanations the IRS will accept:

  • Your country of permanent residence does not issue foreign personal identification numbers.
  • You are not legally required to obtain a foreign TIN.

Keep reading: Taxes to foreigners (residents and non-residents) in the United States: Complete guide

Please contact the tax authority or equivalent in your country of permanent residence to obtain a foreign TIN.

You can also see a list of national standards for some jurisdictions on the Organization for Economic Co-operation and Development (OECD) website.

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