@ale_marcano , having gone through the above discussion and generally agreeing with @Opus 17 and @Anonymous_ , still I would like to add the following:
(a) an US registered entity ( i.e. one operating under the US tax laws ), has at least three extra-business requirements ---
1. withhold employee taxes and transmit to the taxing authorities as part of Pay as you earn -- US version . Therefore the need for EIN;
2. Contribute to employees' FICA , collect the FICA taxes and transmit to taxing authorities;
3. File its own tax return ( stand-alone or otherwise ) hence the need for a Tax ID. It uses EIN ( for states often EIN or a separate ID for State of domicile/ registry ). Depending on the type of entity , there are differences in how the reporting is done , which form and whom pays the taxes due.
(b) A foreign entity with nil presence ( physical and income source/ connection ) in the USA is beyond the ambit of US tax laws , even if owned by a US person/entity -- generally. However the income from such endeavors that is attributable / flowing to the US person/ entity is part of the world income of the taxpayer ( person /entity).
(c) Therefore the whole question of tax id, reporting of the income etc. of a foreign entity ( constituted under the laws of another country is generally not applicable.
(d) A US person having a sole proprietor business ( be it a store/ consulting/ professional services or what have you ) in another country, however is a taxpayer with a foreign source of income. This income indeed can /should be reported as a Schedule-C income and may be eligible for Foreign Earned Income exclusion and/or foreign tax credit. This treatment is identical if the taxpayer were located in the USA or with a taxhome in foreign land.
Does this make sense ?
pk
