Patchy tax logic, high risk and support costs

This fast-growing cloud platform enables developers to deploy and scale applications globally. The company is currently focused on rapid expansion across EMEA and APAC. With nearly three-quarters of its $690M+ revenue generated outside the U.S. and additional expansion planned,  tax compliance complexity and risk increased, particularly for markets not covered by their existing tax engine.

The business was registered for VAT in 34+ jurisdictions and needed to charge tax accurately on 7.3M+ cross-border digital transactions annually. However, VAT ID validation relied solely on VIES in the EU and format checks elsewhere, leaving them vulnerable to tax misclassification and under-collection. Downtime, outdated data, and missing access to local taxpayer databases compounded the risk.

At the same time, customer support teams fielded thousands of tickets monthly related to tax errors, invoice issues, and missing VAT data—driving operational cost and user friction. New VAT registrations in underserved countries like Uganda and Morocco also forced the company to hold VAT reserves, further impacting the balance sheet.

One API for global validation and calculation

The team adopted Fonoa’s Lookup and Tax Engine products to standardize and automate tax determination across their global footprint:

Lookup enables live VAT ID validation in 110+ countries, including direct access to all local EU databases beyond VIES, and the ability to search for missing VAT numbers by company name.

Tax Engine provides real-time, localized VAT calculations—including for challenging markets like Armenia, Senegal, Uganda, and Morocco—all via a single API that integrates seamlessly with their internal systems.

The solution eliminated reliance on cached validations or incomplete data, while helping the company accurately distinguish between B2B and B2C customers. It also enabled proactive VAT treatment updates as thresholds were met in new regions, without engineering bottlenecks.

$6.8M in risk and workload avoided

Within three years, the customer has agreed that the combined Lookup and Tax Engine implementation will deliver measurable value to their business:

• $1.02M in annual VAT under-collection avoidance, by validating and classifying customers accurately
• $612K in customer support savings, by eliminating 18,000+ hours of ticket resolution time
• $593K in VAT reserve liabilities removed, by enabling accurate tax calculation in four new markets

This all contributes to a total risk and workload impact avoided of $6.8M, with a 3-year build cost avoidance of over $2.2M compared to internal development.

By removing manual workarounds and legacy limitations, the business established a scalable, audit-ready tax stack fit for global growth.

‍