How is a prop firm's revenue taxed?

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Accepted Answer

A prop firm's revenue is normally taxed as business income in the country where the company is resident, after deductible costs such as payouts, marketing and software. Sales taxes such as VAT may apply to digital services sold to consumers in some countries. Rules differ widely, so use a local accountant.
Tax questions to settle early:
Corporate tax: where the company is resident and taxed.
Deductibility of payouts: how payouts to traders are treated as a cost.
Indirect tax: VAT or GST on evaluation fees sold to consumers in other countries.
Withholding: whether payouts to traders abroad carry withholding obligations.
Personal tax: how profits reach you as the owner.
If you sell through a merchant of record, it may handle indirect tax on sales for you; check what your provider covers. PropExecutor's own sales are handled by Dodo Payments as merchant of record, but your traders' payments go through whichever provider you choose. This is general information, not tax advice.
### Records that make tax simpler
Keep sales, refunds, chargebacks, payouts and supplier invoices organised monthly, with the country of each customer where indirect tax may apply. Clean records save far more in accounting fees than they cost to keep.

How is a prop firm's revenue taxed?

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Records that make tax simpler

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