ITIN for PayPal, Music Platforms & Online Subscriptions

Many non-US business owners want to use US payment systems.
PayPal.
Music streaming platforms.
Subscription websites.
SaaS platforms.
And other US-based gateways.

These platforms often ask for more than a passport or business license.
They want a US tax number.
They want an EIN for your business.
And an ITIN for the individual owner.

This guide explains why they ask for it, which W-7 reason you must choose, and how the full process works.

Small sentences.
Clear steps.
A simple diagram included.

Why They Ask for an ITIN

US payment platforms handle money that may trigger tax reporting rules.
They must report who owns the business.
They must verify the identity of each owner.
They must provide tax forms when required.

So they ask for:

• Business documents

• EIN

• ITIN of the owner

If you do not provide the ITIN, you may face:

• Account freeze

• Payment holds

• Higher withholding

• Trouble accessing payouts

The ITIN fixes all of these issues.

Who Needs an ITIN in This Situation?

You need an ITIN if you are:

• A non-US business owner opening a PayPal Business account

• A founder running a music-subscription platform like AngkorSound

• A creator selling digital products to US customers

• A SaaS owner collecting recurring payments

• A marketplace seller receiving payouts from US platforms

• Anyone who receives US-sourced income but does not have an SSN

The ITIN allows the platform to link your identity with your business.

Visual Diagram: Business ITIN Path

 

                       START
                         |
                         |
     Did the platform already issue you a tax form?
                         |
             +-----------+-----------+
             |                       |
            Yes                     No
             |                       |
  Which form did you receive?     Platform asks for
             |                    EIN and ITIN now?
     +-------+--------+                 |
     |                |                 |
 1042-S            1099-K            +--+--+
     |                |              | Yes |
     |                |              +-----+
Reason (a)           Reason (b)         |
Exception 1(a)       Attach 1040-NR     |
Attach 1042-S        with your form     |
     |                |              Reason (h)
     |                |              Explanation:
     |                |              "Exception 1(a).
     +-------+--------+              Payor requires ITIN."
             |
           APPLY
             |
       IRS processes file
             |
         ITIN issued
             |
   Submit updated W-8BEN or
  business verification to platform

Which W-7 Reason Should You Select?

Different business situations require different W-7 reasons.

Below are the three most common cases.

Case 1: You already received Form 1042-S

Your platform treated you as a foreign person.
They withheld tax.
They issued Form 1042-S for your business payouts.

Select:

• Reason (a) Nonresident alien required to obtain ITIN.

Write this below:

• “Exception 1(a). Form 1042-S enclosed.”

You do not need to attach a tax return.

Case 2: You received Form 1099-K

This happens when the platform does not treat your payments as foreign-sourced.
Some payment providers send 1099-K even for foreign business owners.

Select:

• Reason (b) Nonresident alien filing a US tax return.

You must attach:

• 1040-NR tax return

• 1099-K or payout statement

This is required for approval.

Case 3: The platform asks for EIN + ITIN before activating your account

This is the most common.

Platforms that do this:

• PayPal

• Stripe Atlas sometimes

• Music platforms

• Subscription platforms

• Payment processors

• Online marketplaces

They want to verify:

• Business EIN

• Owner identity

• Owner’s US tax number (ITIN)

Select:

• Reason (h) Other.

Write this explanation:

• “Exception 1(a). Payor requires ITIN to report business payments.”

You must also attach:

• A letter or email from the platform
  or

• A screenshot of the verification request
  or

• A CAA-approved substitute note

Required Documents

1. Passport

Clear.
No shadows.
No glare.

2. Proof from the platform

Any of the following:

• 1042-S

• 1099-K

• Email from PayPal

• Verification screenshot

• Business dashboard message

3. EIN Letter (if available)

This is often required for business accounts.

4. W-7 Form

Correct reason selected.

5. Business address and foreign home address

Both must be valid.

Step-by-Step Application Process

Step 1: Identify your business income type

Is it subscription revenue?
Music revenue?
Digital product sales?
Service revenue?

Step 2: Determine which tax form you received

1042-S
1099-K
Or nothing yet.

Step 3: Select the correct W-7 reason

Use the guide above.

Step 4: Gather your documents

Passport.
Business docs.
Platform verification email.

Step 5: Verify your identity

Through:

• Certified Acceptance Agent
  or

• Embassy
  or

• Mailing your passport (not recommended)

Step 6: Submit the application

CAA submits it correctly.
IRS processes it.

Step 7: Receive your ITIN

ITIN arrives in the CP565 notice.

Step 8: Update the platform

Provide:

• ITIN

• EIN

• W-8BEN (or W-8BEN-E if needed)

Your account becomes fully verified.

Common Scenarios

PayPal business owner outside the US

Use Reason (h) with PayPal’s verification request.

Music subscription platform owner (AngkorSound etc.)

Use Reason (h) if platform demands ITIN.
Use Reason (a) if you received 1042-S.

SaaS owner collecting US payments

Use Reason (h) with platform request.

Marketplace seller receiving US payouts

Use Reason (b) if you received 1099-K.
Use Reason (a) if you received 1042-S.

Summary Table

Final Thoughts

Non-US business owners need an ITIN for many reasons.
Payment platforms want clean tax information.
This keeps your account safe.
This keeps your payouts smooth.
This keeps your business compliant.

Once the ITIN is issued, you can link it with your EIN and provide the correct W-8BEN or W-8BEN-E.
Your business can then operate globally without interruptions.