Software businesses operate globally, creating global tax complexities - here is where Fonoa steps in

OBLIGATIONS

As a SaaS business selling globally, you need to be efficient with taxes

Understand who your customers are from a tax status perspecitve

As a Software-as-a-Service company, your customers could be both businesses and consumers, but your biggest contributors to revenue growth and retention will most certainly be the B2B segment. In order to understand if you need to tax them and invoice them properly, you’ll need to check and validate their tax ID numbers.

Know if, when, and how much you need to charge in indirect taxes

Once you know who you need to tax and who not (also very relevant), you will need to determine what indirect taxes to charge based on the rules of the country of your customer. Typically, this will depend on the nature of your services and the amount of sales you have generated to each country.

Issue invoices compliant with local tax juridstictions

As a SaaS business with a broad customer reach, you could often hear requests for compliant invoices, especially from your business customers. They need this for accounting and tax compliance purposes, and not meeting their demands means increased customer support costs, manual work, and potential churn.

Report transactions to tax authorities if required

If you are rendering your services in different countries through a local branch or legal entity, you may be required to report your sales transactions in real-time to the tax authorities electronically (e.g. selling to customers in Mexico via a Mexican entity).