What Does FEIN Mean | Business Tax Guide

FEIN stands for Federal Employer Identification Number, a unique nine-digit number assigned by the United States Internal Revenue Service (IRS) to businesses for tax identification purposes. Although FEIN is primarily a US term, understanding its meaning and function is useful for UK businesses engaging with US partners or operating internationally. This article explains what FEIN means and its relevance.

Defining FEIN

FEIN, also known as Employer Identification Number (EIN), is a tax identification number used to identify a business entity in the US. It is similar to a UK company’s Unique Taxpayer Reference (UTR) or VAT number but specifically for US federal tax purposes.

FEIN is issued to entities such as corporations, partnerships, sole proprietorships with employees, non-profits and trusts.

Why FEIN Matters

FEIN is required for businesses to file tax returns, hire employees, open bank accounts and apply for business licenses in the US. It is essential for compliance with IRS regulations and enables efficient processing of tax information.

For UK businesses working with US clients or subsidiaries, obtaining or understanding FEIN is important for smooth operations.

How to Obtain a FEIN

Businesses apply for a FEIN through the IRS either online, by mail or fax. The process is straightforward and free of charge.

Uses of FEIN

FEIN is used for tax reporting, payroll processing, opening bank accounts, applying for loans and other official business activities.

Differences from UK Identifiers

While FEIN serves US tax purposes, UK businesses use different identifiers such as UTR, VAT numbers and Companies House registration numbers.

Conclusion

FEIN stands for Federal Employer Identification Number, a US tax identifier essential for business operations in America. Understanding FEIN helps UK businesses navigate international tax and compliance requirements.