EIN Services for Foreign Sellers
EIN services for foreign sellers are an essential part of complying when conducting business in the U.S.
You will want to obtain an EIN from the IRS before selling on a U.S. marketplace facilitator platform (Amazon, eBay, Walmart). Although an EIN is not required for most marketplace facilitator platforms, it is recommended.
A foreign Amazon.com FBA seller (with physical inventory stored in the U.S.) will need it to file U.S. federal and state sales tax returns. Why?
When a foreign Amazon.com seller imports goods into the U.S. and use FBA, this creates effectively connective income (ECI), but not a permanent establishment. Therefore the foreign operating business will need to submit a U.S. return.
If you operate as a foreign individual, that means you will file a 1040NR, W-7, and 8833 (assuming there is a tax treaty with your country).
If you operate as a foreign corporation, you will file a protective return 1120F, 8833, and 5472.
You will also need an EIN for sales tax registrations and at other stages in your business. It is easier to have it in place upfront vs. going through a verification process after your account is up and running.
Business Start Date on SS4:
If you have already been selling on Amazon.com via FBA, and when applying for the EIN, if your start date is in a previous tax year, that may trigger preview tax returns, along with possible late fees. We have more details on the start date during our process and can refer you to a CPA firm for an evaluation (those fees are separate).
A Tax ID Number also called EIN. This is obtained through the IRS on form SS4. This is required for registering for sales tax permits, and it is easier to set up your tax settings on a new platform with an EIN vs. updating it after you are in full sales mode.
EIN services for foreign sellers will also help with customs.
The marketplace facilitator, in most cases, will need to verify any new EIN.
As a foreign seller, you may call the IRS and obtain the EIN over the phone (assuming you get through). That’s the easy part. The important part is making sure you answer the questions correctly on the SS4 application because the IRS will determine what US tax return is required based upon your answers to their questions. The IRS is not there to give you advice. If you give the wrong information, you will end up filing the wrong return.
Here is where the mistakes happen, on lines 5a, 5b, 7a, 9a, 10, 11, and 12 of the SS4 application.
What does it require to update the SS4 application submitted to the IRS?
Your options include filing form 8332, if appropriate, to make another election with the IRS that will match the expected US tax return to be filed. Even if there is a tax treaty with your country, you will want to make sure you file the correct U.S. return to take advantage of treaty benefits.
There is no official process for changing your SS4 application mistakes, other than writing the IRS a letter. This should be sent certified mail, and it may take months to receive an answer, which may or may not be approved to what you want to change. The other approach is to work with your CPA firm to file the corrected US tax return, wait for the IRS to send a letter that the wrong return was filed, and then reach out to the IRS to let them know there was a mistake on the SS4 application and see, at that point, if they will fix it.
In the end, it Is better to make sure your EIN is filled out correctly. Our team has a detailed spreadsheet of different situations and how to fill out the SS4 application. This has been reviewed by tax professionals (more than one) to make sure everything matches up. Sales Tax System’s internal SS4 spreadsheet is used to check your SS4 application before we call the IRS:
When you apply for an EIN, you may also need to file IRS form 8832 or need an EIN on your foreign entity.
EIN Options and our Fees:
$250 EIN Service + File IRS form 8832
This is recommended for a U.S. single member LLC owned by a foreign individual. Or for a U.S. single member LLC owned by a foreign entity (where the foreign entity already has an EIN).
$400 EIN Service (both US LLC and Foreign Entity) +
File IRS form 8832
This are recommended for a U.S. single member LLC owned by a foreign entity (where the foreign entity DOES NOT already have an EIN).
After payment on the link above, you will receive an email with a link to an EIN web form. The webform has instructions and tips on how to provide us what we need to apply for your EIN.
Once we received your webform, we will receive it for accuracy and follow up with any questions. We must be clear on your foreign entity’s taxation and what US tax return is expected to be filed, even if a protective return.
We will prepare the SS4 application for your signature before we submit to the IRS.
Once you submit your web form to our team, and the SS4 is emailed to you for your signature and returned via email, our team will fax it to the IRS within 24 hours. The IRS time frame ranges from 6-15 business days, assuming phone access is not available.
Yes, this is the most important part of the process. Especially the information that we need to put on 9a. Our team has a very complex chart to review to match your situation and the IRS’s correct tax return. You only got one chance to do this correctly; otherwise, the following with the IRS with returns and amended returns is a real challenge later.
Yes, we have an internal chart that matches up the tax return and due date required based upon how your SS4 is filled out. We work with tax firms that are on the same page and have experiences filing the required return and treaty disclosures as required. The tax firm fees for filing returns are separate, of course.