Jacques Mattheij

Technology, Coding and Business

Taxes

One thing that has bitten more than one freemium company is to forget to reserve taxes. Typically wherever you’re incorporated you pay sales tax (VAT, BTW, MwST whatever it is called where you live) over the sales to the inhabitants of that same economic zone.

You need to reserve for this because if you get found out to be in arrears this can be levied until many years after with huge fines attached, so best make sure you get this done right.

For instance, my own company has to split out taxes for all the eurozone countries and sells without sales tax to those outside of it. This is a big factor when deciding where to incorporate.

There are other taxes you should reserve for, typically a conservative company will save up to 30% of it’s turnover for tax purposes and to enable it to deal with unforeseen circumstances.

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