Fonoa, a tax automation company used by firms such as Uber and Zoom, has recently secured $60 million in a Series B round of funding. Established in Dublin, Ireland, the company targets global digital services companies, automating many of the processes involved in managing VAT, sales tax, and goods and service tax (GST), wherever the company’s wares are sold.
The services offered by Fonoa include tax ID validation, which allows its customers to instantly know the tax status of their suppliers and users so they can employ the right type of tax at checkout.
This is crucial as many governments collect taxes based on where a service is consumed instead of where the service provider is located.
Therefore, Fonoa coordinates with the VAT Information Exchange System (VIES) of Europe, among the other national databases around the globe, so that the digital service provider comes to know instantly about what type of taxes should be charged.
In addition to this, Fonoa is also capable of estimating how much sales tax, GST, or VAT is applicable based on the corresponding locations of the vendors and end users.
Then, it can create tax-compliant invoices and receipts locally for 100+ countries.
As per credible sources, automation is the key selling point to all of this as companies like Zoom and Uber, who are processing several transactions across several countries every month, can find estimating all the applicable taxes manually a labor-intensive process.
This becomes even more complicated when all the potential variables are included, like the customer’s location, be it a B2B or B2B transaction or even a type of service or product being sold.
Furthermore, the firm has earlier raised a funding of $20.5 million, and in the prevailing months, the Irish company has expanded its headcount to 130 people across 20 countries.
Source Credit – https://techcrunch.com/2022/07/21/fonoa-raises-60m-to-automate-tax-compliance-and-calculations-for-global-companies-like-uber-and-zoom/