What is a foreign tax identification number (FTIN)? Complete guide

Hiring and managing international employees used to mean navigating a maze of tax compliance requirements that could trip up even experienced HR teams. 

One wrong form, one missed identification number, and suddenly you're dealing with penalties, delayed payments, and frustrated workers who can't get paid properly.

The foreign tax identification number (FTIN) was introduced to bring order to this complexity. It provides a standardized way for tax authorities to identify individuals and businesses in foreign jurisdictions, making cross-border income reporting more reliable and reducing compliance risks.

With remote work driving international hiring and companies relying more on global contractors, FTINs have become critical. They are required not only for accurate tax reporting but also for securing treaty benefits and maintaining compliance across multiple countries.

Whether you're hiring your first remote developer in Brazil or expanding into European markets, knowing when you need an FTIN, how to get one, and how to manage the process correctly can save you significant headaches down the road.

What is a foreign tax identification number (FTIN)?

A foreign tax identification number (FTIN) is a unique identifier issued by a country’s tax authority to identify individuals or businesses for tax purposes. 

In simple terms, it’s the number that allows a government to know who you are when it comes to taxes. For employers, “foreign” means the tax ID from the country where the employee or contractor lives, not where your business is based.

For example:

• In Germany, it’s called Steuerliche Identifikationsnummer

• In France, it’s the Numéro d’Identification Fiscale (NIF)

• In Italy, it’s the Codice Fiscale

In the U.S., the equivalent would be a Social Security number (SSN) or Individual taxpayer identification number (ITIN) for individuals or an Employer identification number (for businesses).

The terminology may differ, but the role is the same: to give tax authorities a standardized way to track who owes taxes and who may be eligible for tax treaty benefits.

FTINs are especially important in international business. For instance, if a U.S. company hires a software contractor in Germany, that contractor must provide their German tax ID. Without it, the payment could be subject to higher withholding taxes, and the contractor might lose out on the protections of the U.S.–Germany tax treaty.

The format of FTINs also varies widely: some are just numbers, others mix letters and digits, and many include specific check digits. Knowing these differences matters if you’re managing payroll or contractor payments across multiple countries, since even a small formatting mistake can cause delays or compliance issues.

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Who needs a foreign tax identification number?

Several types of workers and businesses typically need an FTIN, depending on their income and tax obligations:

1. Foreign employees working for a U.S. company: Employees based abroad often need an FTIN in their home country to meet local tax obligations, even if their employer is in the U.S.

2. Remote international contractors: Freelancers and service providers paid from abroad, such as a U.S. company hiring a developer in Portugal, must have a local tax ID to properly report and pay taxes.

3. Companies operating across borders: Businesses expanding into new markets or hiring internationally usually need tax IDs in each country where they operate to comply with reporting and withholding requirements.

4. Digital nomads with multi-country income: People working remotely across different countries may need multiple FTINs depending on their tax residency, travel patterns, and applicable tax treaties.

Types of taxpayer identification numbers in the U.S.

While the U.S. uses several types of taxpayer identification numbers, each applies to a specific purpose and requires its own application form.

Social Security number (SSN)

For most individuals in the U.S., the Social Security number is the primary taxpayer identifier. It was originally created for Social Security benefits but has since become essential for employment, taxes, and even financial services like banking or credit applications. To obtain one, applicants must complete Form SS-5 (Application for a Social Security Card).

Employer identification number (EIN)

Businesses, nonprofits, and foreign companies with U.S. operations use EINs for tax reporting, hiring employees, and opening business bank accounts. The internal revenue service (IRS) issues EINs when businesses file Form SS-4 (Application for Employer Identification Number). An EIN, also known as a federal tax identification number essentially functions as a Social Security number for a business, making it indispensable for nearly all official transactions.

Individual taxpayer identification number (ITIN)

When someone doesn’t qualify for an SSN but still has a U.S. tax obligation, they use an ITIN. This often applies to nonresident aliens earning U.S. income, or foreign spouses and dependents of U.S. taxpayers. The ITIN is requested with Form W-7 (Application for IRS Individual Taxpayer Identification Number), and it enables individuals to properly file returns and claim treaty benefits while ensuring the IRS can track their tax responsibilities.

Adoption taxpayer identification number (ATIN)

In adoption cases where parents cannot obtain a Social Security number for the child before filing taxes, the IRS provides an ATIN. Issued through Form W-7A (Application for Taxpayer Identification Number for Pending U.S. Adoptions), this temporary number lets adoptive parents claim the child as a dependent until the adoption is finalized and an SSN can be assigned.

Preparer taxpayer identification number (PTIN)

Anyone who prepares federal tax returns for compensation is required to have a Preparer taxpayer identification number. Unlike other identifiers, the PTIN is used exclusively by tax professionals and must appear on every return they file. The IRS makes the application process straightforward through Form W-12 (IRS Paid Preparer Tax Identification Number Application and Renewal), helping regulate and track the work of paid tax preparers.

How to get a foreign tax identification (FTIN) number

The process for obtaining an FTIN varies significantly by country, but most follow a similar general framework. Always verify specific requirements with local tax authorities, as procedures and documentation requirements can change.

Step 1: Determine if you're required to get an FTIN

Not everyone will need an FTIN. Whether you must apply depends on factors such as residency, income level, type of work, or whether you’re claiming treaty benefits. Some countries issue FTINs automatically, while others require a formal application.

Step 2: Gather required personal or business documents

Tax authorities typically require proof of identity and eligibility. This might include a passport, proof of address, birth certificate, or business registration documents. In some cases, certified translations are also needed.

Step 3: Contact the foreign country's tax authority

Every jurisdiction has its own rules. Some countries offer online portals, others require in-person registration, and a few assign tax IDs automatically when you register locally. Always verify the current process with the official tax authority.

Step 4: Complete the official application form

Fill out all required forms completely and accurately. Many countries have specific formatting requirements for names, addresses, and other data fields. Double-check everything because errors often result in rejection and delays.

Step 5: Submit your application and pay any fees

Submit your completed application through the required channel, whether online, by mail, or in person. Include all required supporting documents and payment for any application fees. Keep copies of everything you submit for your records.

Step 6: Wait for confirmation and your assigned FTIN

Processing times vary widely by country, from a few days to several months. Some countries provide tracking numbers or online status checks, while others simply mail confirmation when processing is complete. Plan accordingly if you need the FTIN by a specific deadline.

Step 7: Update tax forms and employer records

Once you receive your FTIN, update all relevant tax forms, employer records, and financial accounts. This ensures proper tax treatment and compliance going forward. Notify anyone who needs the number for reporting purposes.

Step 8: Renew or update as needed

Most FTINs don’t expire, but they may need updating if your details change (such as name, address, or business registration). Check if your country requires periodic renewals to stay compliant.

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Common challenges with FTINs

Working with foreign tax identification numbers isn’t always straightforward, and businesses often run into the same problems.

• Every country has its own rules, forms, and documentation. What works in Germany might look completely different in Brazil or Singapore, making it tough to create one standard process.

• Language and cultural differences add to the complexity. If tax authorities don’t provide guidance in a language you understand, small translation errors or misunderstandings can slow everything down.

• Delays are common. Even with perfect paperwork, some countries take weeks or months to process applications, which can hold up payroll and frustrate international teams.

• Mistakes on forms can have serious consequences. A single wrong number might cause withholding problems, compliance violations, or penalties that are expensive and time-consuming to fix.

• Keeping track across multiple jurisdictions is a challenge. When a company hires in five or ten different countries, managing all those numbers, formats, and deadlines quickly becomes a heavy administrative burden.

Best practices for managing FTINs

However, managing FTINs doesn’t have to be overwhelming if you set up the right habits and systems. A few best practices go a long way in avoiding compliance headaches and keeping everything on track.

1. Keep accurate records

The first step is having one place where every FTIN is tracked. Using a centralized system, like Rippling’s payroll compliance software, makes it easier to see which employees or contractors have which tax IDs, avoid duplicates, and flag upcoming renewals so there are no payroll disruptions.

2. Verify information annually

FTIN requirements can change, and some numbers need periodic renewal. Employers should set up routine reviews, ideally once a year, to confirm IDs are valid and current. This reduces the risk of errors during payroll runs or tax filings.

3. Communicate updates to employers or tax advisors

Whenever a new FTIN is issued or an existing one changes, it is important to get that information to payroll, compliance staff, and tax advisors right away. A clear update process keeps everyone aligned and prevents delays in payments or reporting.

4. Work with local experts for compliance

Since every country has its own rules, working with local tax advisors or legal experts helps employers stay on top of requirements. They can guide you on specific documentation, translation needs, and evolving regulations that might otherwise slip through the cracks.

Hire and pay international workers compliantly with Rippling

Managing FTINs and international tax compliance becomes significantly easier when you have the right systems in place. Rippling payroll and hiring simplifies the complexities of managing a global team by handling local compliance, currency conversion, onboarding, and everything in between through a unified platform.

With Ripppling, you can: 

• Onboard employees and contractors quickly, setting up new hires with everything they need to be productive regardless of their location. The platform automatically handles the documentation and compliance requirements that typically slow down international hiring.

• Pay everyone in their local currency within minutes, without waiting on bank transfers or currency conversion delays. Rippling’s global payroll software supports 185+ countries and 50+ currencies, automatically calculating and filing payroll taxes for employees worldwide.

• Eliminate the data silos and busywork that come from managing multiple systems for global teams. Instead of juggling separate platforms for HR, IT, and finance, everything operates from a single source of truth that automatically syncs data across functions.

• Automate compliance and take the guesswork out of international employment law. Rippling automatically flags risks as they appear and provides guidance on country-specific requirements, helping you avoid the costly mistakes that can derail international operations.

• Expand globally. Rippling offers multiple engagement models. This means you can hire and pay contractors globally without establishing entities, use Employer of Record services for international employees, or run payroll through your own entities once you're established in specific markets.

No matter where you are in your global growth journey, Rippling adapts to your needs and ensures compliance at every step.

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