The Seller Abroad

Using FBA to sell on Amazon from abroad… can't be that hard!

Tag: Tax information

Tax ID Cheat Sheet

Getting a Tax ID

Following on from my Tax ID clarified post, I have constructed a Tax ID Cheat Sheet to walk you through the steps to obtain a federal tax ID in the USA. This should simplify the process significantly as I had to do a lot of research to get mine done. So here goes…

Tax ID – Cheat Sheet

 

  1. First check if your country of residence has a tax treaty with the US. Find out if you need to pay income tax in the US, in your country of residence or both by checking with your country’s government tax website;

 

  1. If you are not based in the US and are not going to file an income tax return in the US, then you will need to apply for an EIN in order to file for Sales Tax in the relevant US states/territories;

 

  1. If you will be filing an income tax return in the US, then you will need to apply for an ITIN (not covered in this cheat sheet);

 

  1. Live abroad and need further advice/confirmation on which tax ID you need to apply for? Call this number, +1 267 941 1000 and follow the prompts (press 1 for English, then option 4 and option 4 again)2. You will be able to describe your business activity and the IRS representative will confirm which ID you need to apply for;

 

  1. Applying for an EIN:
  • You will need to fill and submit an SS4 form;
  • You can do this online if you already have a Social Security Number or an ITIN. I am going to assume you do not;
  • Applications can no longer be filed over the phone and will need to be submitted in writing;
  • You can access the SS-4 form here1 and the official “Instructions for Form SS-4” here1;
  • Your application can be mailed or faxed – if faxing, ensure you send your fax to the number for international applications as shown on the “Instructions for Form SS-4” document on page 2 (+1 267 941 1040);
    • The IRS aim to respond to mailed applications within 6 weeks;
    • The IRS aim to respond to faxed applications within 5 working days;
  • If you haven’t heard back within this time frame or wish to follow up your application, call +1 267 941 1000 and follow the prompts (press 1 for English, then option 1)2;

 

  1. Now that you have your EIN, you can go ahead and register for your sales tax ID with states in which you hold a nexus.

 

Disclosure: I am not a tax advisor and the information provided is only a reflection of what I’ve learnt from my personal experience. Please do your own research and fully understand your obligations before making any decisions.

1Link worked on 26th Jan 2016. Use this link if you are having trouble accessing the site, go to www.irs.gov and search for the SS4 From.

2Promt sequence was accurate as of 26th Jan 2016. Please listen to options to ensure you are entering the correct prompts.

Tax ID… Clarified

Since publishing my post on “Dealing with Tax and Bank Settings,” I’ve received a large number of responses with further questions on both tax and banking. Let’s address tax first. Let me start by answering a couple of common questions:

Q: Do I need a tax ID?

A: If you are selling on Amazon in the US, you will need to pay sales tax. In order to register with states/territories to collect sales tax from your customer, you will require a tax ID. In order to file your sales tax return, you will require a tax ID. So in short, I’d say yes, you need one.

Q: What states/territories do I need to pay sales tax in?

A: You will need to pay sales tax for any sales made to customers within states in which you hold a Nexus. What’s a nexus, I hear you ask…. Well, a nexus is a presence in any state/territory. For our typical case of an entity set up outside the US with stock sitting in a FBA warehouse, you are considered to have a nexus in any state in which your product sits in a FBA warehouse.  Given this situation, you will need to register for and pay sales tax to any state in which a FBA warehouse holds your product.

Getting a Tax ID

So first step is to get a tax ID. I know from experience that the process of identifying and applying for the required tax ID can be painful due to the lack of clear information available. I have simplified the process by putting together a “Tax ID – Cheat Sheet”. The Cheat Sheet is a detailed walk-through to obtain a tax ID.

This Tax ID – Cheat Sheet is available as a premium post. You can check it out here 

 

Disclosure: I am not a tax advisor and the information provided is only a reflection of what I’ve learnt from my personal experience. Please do your own research and fully understand your obligations before making any decisions.

Powered by WordPress & Theme by Anders Norén