A taxpayer identification number (TIN) is a combination of unique characters, provided by the tax authorities to individuals and entities for tax purposes. TIN is provided to identify a person or entity to administer the government’s tax laws. Most countries issue this number for the proper management of their tax affairs.
However, there are countries like Bahrain, Bermuda and UAE, which don’t issue TIN. These number varies from country to country. For instance, in the UK the TIN is the National Insurance number of an individual, whereas companies have a Corporation tax number.
This number is also called Employer Identification Number, National Insurance Number, Personal Identification Number, and Social Security Number.
Uses of Taxpayer Identification Number (TIN):
The tax identification number is used for:
- For Getting Loan or Credit: Almost all lenders and banks require this number for providing credit. It is required to get a sufficient amount of information about the person who’s going to get a loan. TIN is also useful for tracking the credit history of the person.
- For Employment: TIN is also be used for employment purposes. It is used as a verification number that ensures that the person is eligible to work in a certain country.
- For Businesses: If you’re running a business, it also needs a tax identification number to file its taxes and to comply with the law. Investors might need it for checking the financial health of your business.
This number ensures that the tax you pay is properly recorded in your account against your name.
To comply with international tax agreements, financial institutions like West Brom need to have information of the tax residents and the Tax identification number of those who’re eligible for the UK tax but living abroad.
Quick Sum Up:
Most of the world’s countries use taxpayer-identification numbers for the purpose of taxes, employment, credit, and benefits.
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Disclaimer: This blog provides a general overview of TIN.