I'm a Filipino citizen in the Philippines, how can I get an ITIN?
October 7, 2012 9:48 PM   Subscribe

I'm currently a contractor for a U.S. based website which has just changed owners. The new owners now require all contractors to send updated IRS forms 8233 and W-8BEN. I'm a Filipino citizen residing in Manila. I do not have an ITIN - this was never required of us before. The new requirements presuppose that I have an existing ITIN.

From my research, it seems I'll need to fill up a W-7 form to get an ITIN of my own. I'm a "nonresident alien required to get ITIN to claim tax treaty benefit"; the US and the Philippines share a tax treaty. None of the local accredited acceptance agencies want to touch my case, it seems too complicated for them.

I have a passport, a signed contract, and marriage/birth certificates as proof of foreign residence. Apart from this, I cannot seem to make any headway as to the best way to proceed. Please help!

(You are not my tax accountant and all that, I know... but any informed opinion is welcome. I am utterly lost.)
posted by micketymoc to Work & Money (6 answers total) 1 user marked this as a favorite
The only way I know of to get an ITIN is to send the appropriate form when you file a US tax return. Can the parties just leave the ITIN blank until that occurs.
posted by crazycanuck at 10:00 PM on October 7, 2012

You really should consult a professional. I am not a accountant or tax professional of any kind. That being said, the instructions for Form 8233 say:
If you do not have an SSN and are not eligible to get one, you must get an individual taxpayer identification number (ITIN). To apply for an ITIN, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS. In most cases, you apply for an ITIN when you file your tax return for which the ITIN is needed. However, if the reason for your ITIN request is because you need to provide Form 8233 to the withholding agent, you must file Form W-7 and provide proof that you are not eligible for an SSN (your Form SS-5 was rejected by the SSA) and include a Form 8233. It usually takes about 6 to 10 weeks to get an ITIN.

For details on how to apply for an ITIN, see Form W-7 and its instructions. Get Form W-7 online at IRS.gov. Click on Individuals, then Individual Taxpayer Identification Numbers.

If you have applied for an SSN or ITIN but have not yet received it, you may attach a copy of a completed Form W-7 or SS-5 showing that a number has been applied for.
From that paragraph, I think they're saying you should apply for a Social Security Number (SSN) using Social Security Form SS-5. You will either get one, or get rejected. If you are rejected (which you almost certainly will) you should apply for an ITIN using IRS Form W-7 (W-7 instructions). Use the rejection of your Form SS-5 as the document required by "Exception #2" from the W-7 instructions, i.e. "Documentation you must submit if you are eligible to claim Exception 2(a):
• A letter of employment from the payer of the income, or
• A copy of the employment contract, or
• A letter requesting your presence for a speaking engagement, etc.

along with:

• Evidence (information) on the Form W-7 that you are entitled to claim the benefits of a tax treaty, and
• A copy of the completed withholding agent’s portion of Form 8233 attached to the Form W-7, and a letter from the Social Security Administration (SSA), stating that you are ineligible to receive a social security number.
Sounds like you have everything you need except the SSN rejection letter from Social Security, the portion of Form 8233 that needs to be signed by your employer, and the treaty article number requested on Form W-7. The instructions for Form W-7 suggest you can get the treaty information from IRS Publication 901 (see the section on tax treaties with the Philippines).

Note that it's not necessarily the end of the world if you can't get this paperwork quickly. If you don't complete it your employer will keep a portion of your pay (called a "witholding", your employer gives it to the IRS at each pay period as an approximation to the amount of U.S. taxes you will owe at the end of the year). At end of the year you can file a U.S. tax return to claim all of the withheld money back as a refund if you are indeed not obliged to pay U.S. taxes (which you presumably are not).
posted by RichardP at 10:42 PM on October 7, 2012

Hi micketymoc, please take this all with a large grain of salt since I am not any kind of expert in this area. This was just what I got from reading the information I found.

This should be your go-to page ("Obtaining an ITIN from Abroad.")

You're right, Form W-7 is the one used to apply for an ITIN. The form seems to indicate that since you're checking box A (nonresident alien required to get ITIN to claim tax treaty benefit), you are not required to attach the form to a US tax return. You could just complete the Form W-7, gather your supporting documents to prove identity and foreign status, and mail them all in one envelope to the USA for processing (address on page 3 of the instructions).

Are you comfortable mailing your passport to the USA for the purpose of the application? If you are, that seems to be all you need in the way of supporting documents. You could also go to the US Embassy in Manila and have a copy of your passport notarized by the embassy staff, and send that instead. There are other documents you can send, too, outlined in the instructions. If you decide to send originals instead of copies, the IRS will mail the documents back to you within 60 days.

You're lucky that you're checking box a on Form W-7, that means that you aren't affected by the recent changes on documentation

That's my takeaway from all that. As a last resort, you can call the IRS at +1 267-941-1000 for help. They're open 6 AM to 11 PM US Eastern time zone (currently 6 PM to 11 AM Philippine Standard Time).
posted by texano at 10:49 PM on October 7, 2012

Not to sound paranoid but you should avoid getting an ITIN if at all possible and, from my limited experience of this and limited knowledge of your actual situation, if you are not getting paid in the US then I do not think that you need to get one.

I strongly suggest asking the new owners for support on this and some deeper understanding of their new requirements and you should really, really, get some professional advice on this.

(As an example, once you have an ITIN, if you were to lose or leave that job, would these people continue to take on the administrative burden or would you remain responsible for that. I'm fairly sure that you would need to submit returns for a further 3 years beyond the last year in which you received a relevant payment.)

But seriously, prostrating yourself before the IRS carries a very heavy documentary and regulatory burden many years into the future. Please proceed cautiously.
posted by HopStopDon'tShop at 6:02 AM on October 8, 2012

I operate out of Amsterdam and a couple of US clients have had the same request.

As far as I understand it, you do not need to fill in 8233 as you clearly do not fit into the categories listed in the instructions. you only need to fill Part I of W-8BEN and send it back to your client indicating that the work is completed outside the U.S. and thus exempt from U.S. taxation.

If you have further questions,The American Chamber of Commerce of the Philippines might come handy (American Chambers of Commerce exist all over the world, BTW)
posted by magullo at 6:09 AM on October 8, 2012

Unless this has changed since I did it, as I understood it, you don't need to fill in the part which says "US taxpayer identification number, if required" at all. There is a box next to that for "Foreign tax identifying number, if any", and filling that in seemed to be all that was needed.
posted by philipy at 10:53 AM on October 8, 2012

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