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Apple App Developers Are Developing Apps to Avoid Paying Apple Its Mandatory Taxes

Bipasha Mandal
Bipasha Mandal
Bipasha Mondal is writer at TechGenyz

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According to a few reports, app developers are developing new software so as to avoid paying Apple the taxes when charging users. As of now, Apple charges up to 30% of the transaction amount from the developers. After the legal battle between Apple and Epic games, apple is now bound to allow app developers to provide users with links to other payment systems. Apple is worried that this may hamper its App Store’s overall profit. Notably, in the fiscal year 2020, about 20% of Apple’s revenue came from the App Store profits.

However, it is not clear yet what the developers are preparing in this regard. On the other hand, Apple too has been vague about the steps that would be taken by them to comply with the court’s order. Paddle CEO Christian Owens mentioned that Paddle has come up with three different iPhone payment product implementation plans in the hopes that one of them will be compliant with the rules.

A source describes the mechanism as, “A version of the Paddle Software Development Kit (SDK) allows application manufacturers to provide users with monthly or annual subscription services through an “upgrade now” button. The button links to a webpage hosted by Paddle in the Safari browser, which has multiple payment options, including Apple Pay and PayPal. After the payment is processed, the user will return to the app.”  

Another company called RevenueCat is also taking a similar step. According to its CEO Jacob Eiting, “The real magic is that developers will get a portable link, they can be integrated into external marketing materials, or integrated in the application, using our SDK can immediately unlock access. We assume that developers will still be required to use Apple’s IAP in their apps, but you will now be allowed to connect to external paywalls.”

Other payment systems are likely to charge the developers less than Apple. Owens had made it clear that Paddle will take 5% to 10% of total purchases which is significantly lower than what Apple usually charges. But Owens was quick to mention, “We will build a competitive in-app purchase solution, I mean, even the smallest transaction, we can use 10% of the value of these transactions to do this, and then the price. Adjust it down.”

But Apple is yet to update its guidelines.



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