I highly recommend consulting with a tax professional and understand taxation before you start earning online so that you do not face any legal consequences.

Sales Tax/VAT/GST

• From a SaaS standpoint, you have to collect local sales tax/GST/VAT based on the point of sale. This is irrespective of where you are based out of. For instance, if you are selling to a customer in Texas – you will have to charge them the Texas sales tax and pay the same to the Texas government.
• If you are a SaaS based out of India with Indian customers, you have to charge them 18% and submit the same to the government.
• If you are a SaaS based out of India with a US customer, you have to charge them 0% GST but you have to charge them local sales tax based on their state and submit the same to the local government.
• Most early stage builders and even early stage builders optimise for complying with taxation in their country of operation and may not comply with overseas laws early on
• Use a Merchant of Record Payment Processor to avoid all the local taxation hassles. The same is covered in the next section.

Corporate Tax

• Corporate tax depends on how and where you are incorporated
• If you are registered as a C Corp in US, you have to pay 21% federal taxes and additional state taxes on the profits
• Delaware LLCs allow you to taxed as a Corporation, a Partnership or as a Pass Thru
• If you are a LLC/Pvt Ltd in India, you have to pay 25% flat corporate tax on profits
• There may also be dividend distribution taxes if you choose to distribute dividends

Personal Income Tax

• You will incur personal tax based on the country of operation/applicable laws

Always check for an arrangement wherein the Double Taxation is taken care of in case you are a citizen of country X and operating your company form country Y.