There are many aspects of scaling globally, such as intellectual property protection, offices, staff and infrastructure that founders are quick to get advice on. I will go through some of the most common issues that startups face when scaling their companies internationally. Tax is an issue that impacts startups when scaling internationally. Tax can also present the most risk due to the almost endless tax laws throughout the world – and the varying penalties. I know, tax can be boring. When startups get excited about the prospect of opening their service to a global market, they do not usually have international tax issues at the top of their to-do lists. It is impossible to cover all international tax obligations for every type of startup in this book. So why am I writing this section? I want to compel you to get professional tax advice. Believe me, it is worth it. EU VAT For Digital Goods If you are selling ‘digital goods and services’ to individuals within the EU, your company is required to withhold EU VAT and pay it to the EU. Digital goods or services are categories as being:
- not a physical, tangible good.
- essentially based on IT and would not exist without technology.
- provided via the internet.
- fully automated or involves minimal human intervention.