This makes no sense and impacts a lot of early stage software projects.
In many cases for bootstrap ones it makes them not financially viable - 100%+ effective tax rate would do that if you optimize for early profitability.
Even for VC backed ones, those taxes just eat into your runway. I know a bunch of companies that opt for some weird international setup to try and avoid the effects but it’s really not what you should do in early days…
In many cases for bootstrap ones it makes them not financially viable - 100%+ effective tax rate would do that if you optimize for early profitability.
Even for VC backed ones, those taxes just eat into your runway. I know a bunch of companies that opt for some weird international setup to try and avoid the effects but it’s really not what you should do in early days…