EIN vs. ITIN: Which One Does an Exporter Forming a U.S. Company Need

The difference between an EIN and an ITIN is one of the most common sticking points for
foreign exporters forming a company in the U.S. Both are nine digits, both are issued by the IRS
and both are often called a “tax number.” That is where the similarity ends.
The key difference: one is issued to a company, the other to an individual. A seller who applies for the
wrong one can lose weeks, because the two numbers have
different application forms, timelines and points of contact.

In practice, the confusion usually plays out like this: the LLC is formed, the bank
asks for a number, the seller applies for an ITIN and waits for weeks.
Yet the number the company actually needs is the EIN, and in many cases it can be
obtained within a few business days.

This article separates the two numbers, explains when each one is needed
and gives realistic timelines for applicants based outside the U.S.
Figures are taken from the IRS's own pages, and sources are cited in the text.

What is an EIN, and who gets one

EIN stands for Employer Identification Number, the nine-digit federal tax identification number the IRS issues
to legal entities. In its own definition, the IRS describes it as “a federal tax
identification number for businesses, tax-exempt organizations and other
entities.”

The same page lists who needs one: any structure that has employees,
pays employment or excise taxes, withholds tax on non-wage payments to nonresident
aliens, or operates as a partnership, LLC,
corporation, estate, trust or retirement plan.
LLCs are named explicitly. So the EIN for an LLC you form in Delaware or Wyoming
is not an optional extra; it is the entity's own identity.

In practice, the following do not move forward without an EIN: opening a U.S. bank account,
payment processor registration, the tax interview on most marketplaces and the federal
tax return. We broke down the cost items of a U.S. company line by line in
The Cost of Forming an LLC in the U.S.
and the EIN is one of the free items on that list.

What is an ITIN, and who gets one

ITIN stands for Individual Taxpayer Identification Number and is issued
to individuals. The IRS definition is clear: “a nine-digit number issued by the IRS
if you need a U.S. taxpayer identification number for federal tax purposes
but are not eligible
for a Social Security Number (SSN).”

These two conditions apply together. First, you must have a federal tax
reason; second, you must be ineligible for an SSN.
If either is missing, no ITIN is issued. On the same page, the IRS also lists who does not
need an ITIN: U.S. citizens, nonresident aliens with a U.S. work visa,
green card holders and anyone eligible
for an SSN. One point is especially important: an ITIN does not authorize
work and does not provide or change immigration status. The IRS
states this on its own page as well; claims that it speeds up a visa application
have no basis in tax law.

EIN vs. ITIN in one table

Placing them side by side makes the difference easier to see.

The boxes in the image show where each number comes up
in practice. Briefly, here is what they are:

• Business bank account: a U.S. bank account opened in the company's
  name. Because the account belongs to the company, the application asks for the EIN,
  not your personal number.
• Tax interview: the tax information form Amazon asks you to complete in your seller
  account. If you sell through a company account, you enter the EIN here;
  no ITIN is needed. Details are in the section below.
• Business tax return: the company's annual federal tax
  return. Since it is filed in the company's name, it is tied to the EIN.
• Form 1040-NR: the individual income tax return filed by
  nonresident aliens in the U.S. If you need to file this return,
  the ITIN comes into play, because the return is filed in your name, not the company's.
• Withholding refund: a refund of tax withheld at the source,
  that is, withholding tax. Because the refund is claimed on a personal return, an ITIN,
  not an EIN, is used here as well.

In short: the three items on the left are done in the company's name, the two on the right
in yours. Most exporters only ever deal with the left column.

Which number most foreign exporters need

A clear answer is possible here: for a foreign company that forms an LLC in the U.S. and sells on Amazon or
through its own website, the number it needs is
an EIN, not an ITIN. An ITIN only comes into play when an individual has to file a
U.S. federal return in their own name.

Sellers who miss this distinction tend to share the same story: the LLC is formed, the bank
asks for a "tax number," and the seller, not knowing that an ITIN is personal,
starts a W-7 application. An original or certified copy of the passport is sent,
weeks go by, and in the end it turns out the bank wanted
an EIN. For one food exporter we reviewed, this cycle took two
months, and all of it was unnecessary.

The practical question for deciding: is the party asking for the number asking about the company
or about you? A bank account, a marketplace tax interview, a payment
provider and a company tax return ask about the company, so the answer is an EIN. A personal
U.S. tax return, a filing that falls on you as an owner, or a refund of tax
withheld from income asks about you, so the answer may be an ITIN.

EIN application: how it works without an SSN

This is the most common question: can someone without an SSN or ITIN get an EIN?
Yes. The IRS defines a separate route for applicants whose principal place of business is outside the U.S.,
and that route does not require an SSN.

Form SS-4 is prepared and submitted through one of these three channels:

• Phone: 267-941-1099, Monday to Friday, 6:00 a.m. to 11:00 p.m. U.S.
  Eastern Time. This is the international applicant line.
• Fax: 304-707-9471 from outside the U.S.
• Mail: Internal Revenue Service, Attn: EIN
  International Operation, Cincinnati, OH 45999.

The IRS also states that you can apply for only one EIN per day;
if you are setting up more than one entity, the applications need to be spread over different days.
On fees, the IRS wording is clear as well: "You can get an EIN directly from the IRS
for free, within minutes." If you pay a provider a separate
fee for an EIN, what you are paying for is not the number itself but having the form and the correspondence
handled on your behalf.

When an ITIN application is actually needed

An ITIN is requested with Form W-7, and for the application to be accepted
a federal tax reason has to be shown. In other words, it is not a number you can get
just because it might be useful later.

The IRS's own timelines: 7 weeks for notification under standard processing,
and 9 to 11 weeks during tax season (January 15 to April 30) or for applications
filed from abroad.
An applicant outside the U.S. falls into the second group. When planning, setting aside a three-month
window may be more realistic.

There is also an expiration rule that can come as a surprise: if an ITIN
is not used on any U.S. federal tax return for three consecutive tax years,
it expires on December 31 after the third year.
It is safer not to assume that an ITIN obtained years ago and unused since is still
valid today.

What the Amazon tax interview asks for

A seller registering on Amazon as a business entity completes, in the tax
interview during account setup, the certification form used for foreign entities.
The number requested there is the company's number, so if you are operating with an LLC formed
in the U.S., your answer is the EIN.

If you are operating with your company in your home country, without a U.S. entity,
the picture changes and your home-country tax identification number is usually requested. Which
setup you have is the deciding factor here; for the order of steps and which setup
fits you, the six-step sequence in our
How to sell on Amazon
article may help.

A state-level sales tax number is an entirely separate item and
should not be confused with federal numbers; we covered that distinction separately in our
Sales Tax ID and Resale Certificate
article.

What each order costs on the customs side also needs to be calculated
separately. We covered that side in our
Amazon U.S. customs duties
article.

Three commonly confused points

1. An LLC with an EIN still has filing obligations.
Under IRS instructions, a foreign-owned single-member U.S. LLC is treated as a separate entity for the purposes of
the Section 6038A obligations, and
if it has reportable transactions it files Form 5472. This form
is attached to a pro forma Form 1120 on which only the name, address and two boxes on the first page
are completed. The penalty stated in the IRS instructions for late filing
is $25,000, and an additional penalty of the same amount may apply when the delay exceeds 90
days after IRS notice. This form
cannot be filed electronically.

2. An ITIN is not a prerequisite for an EIN. On an EIN application filed from outside the U.S.,
"foreign" can be entered in the relevant field of Form SS-4 instead of an SSN or ITIN.
Getting an ITIN first and then moving on to the EIN is, in most cases, an unnecessary sequence
that drags the process out by weeks.

3. An EIN is not proof that the company has been formed. The formation document
comes from the state, while the EIN comes from the federal level. They are separate agencies and separate processes.
To complete the formation and handle the annual filings that follow, you can proceed through
our U.S. company formation service
.

Frequently asked questions

What is an EIN?

A nine-digit federal tax identification number that the IRS issues to legal entities formed in the U.S.
The IRS explicitly requires it for structures such as LLCs, corporations, partnerships and trusts.
Bank accounts, marketplace tax interviews and
federal filings all run through this number.

What is an ITIN?

A nine-digit number the IRS issues to individuals who have a federal tax reason
but are not eligible for an SSN. The application is made with Form W-7.
It does not provide work authorization or immigration status.

Do I need an ITIN before I can get an EIN?

No. For applicants whose principal place of business is outside the U.S., the IRS provides
phone, fax and mail options, and these do not require an SSN or ITIN.
Trying to get an ITIN first may only lengthen the process.

How do you get an ITIN and how long does it take?

You apply with Form W-7, and the application must show
a federal tax reason. Processing times published by the IRS: 7 weeks for standard processing,
and 9 to 11 weeks for applications filed between January 15 and April 30 or from outside the U.S.
Applicants abroad fall into the second group.

Are an EIN and an ITIN the same thing?

No. Both have nine digits and both are issued by the IRS, but an EIN belongs to a company,
while an ITIN belongs to a person. The forms are different too: SS-4 for an EIN, W-7 for an ITIN.
One number cannot be used in place of the other.

I have an ITIN. Could it have expired?

It may have. An ITIN that is not used on any U.S. federal tax return for three consecutive tax years
expires on December 31 after the third year.
If you have not filed in the meantime, it is safer to confirm the number's status
before using it.

Conclusion

One question separates the two numbers: is the party asking for the number asking about the company,
or about you? For a foreign manufacturer that forms an LLC in the U.S. and starts selling, the number needed
is almost always an EIN; an ITIN comes up when an individual needs to file a federal return
in their own name. Getting the order right can shorten the time between formation and
the first sale by several weeks.

The amounts and timelines here are based on what the IRS has published,
and it is advisable to confirm your own filing obligations with a U.S. tax advisor.
If you would like to handle the full path from formation to EIN and the first filing
together, you can take a look at
our U.S. company formation service
.