iOS Developer Programme Taxes

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Level 1

0 points

iOS Developer Programme Taxes

I am on the iOS developer programme as an 'individual' and I am from the UK, I have been selling apps for a few months and have been paid since September 2011 (my first payment)

As I did not sell that many to begin with I did not look into the taxes when it came to selling apps (other than the forms for have to fill in when you register under the 'Contracts, Tax, and Banking' section).

Now that I have sold a few more (just over 2000) and have been paid just over £450 of the money from theses apps, I feel that it is time that I look into it, I have heard conflicting reports all over the place, some saying the "30% cut that apple takes means we don't pay tax" some saying "you need to contact the 'taxman' and sign certain forms". I would like to know what I have to do and who I have to contact (if I need to).

Firstly, do I at any stage when selling apps have to pay tax?

If so, is this included in apples cut (and therefore meaning I do not have to do anything)?

If not, who do I need to contact? what forms do I need to sign

Please bare in mind to two important factors that this is an 'individual' account and I am from the UK.

Posted on Jan 12, 2012 2:34 PM

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Answer 1

mark133

Level 1

94 points

Jan 13, 2012 6:45 AM in response to APW93

Generally speaking, after capitalizing the time and expenses you've put into development, and subtracting any fees and expenses associated with the sales, the true 'net income' is what would be taxable income, more or less. But that is tax you owe to your government, not to the US, it appears to me.

The debate is whether such income is 'connected' or not 'connected' to the US. But all it boils down to is whether you pay income tax to your government or the US government.

If you like our taxing scheme better, then you can apply for a US taxpayer identification number. But paying taxes to the US (by making the argument that your activites are 'connected' to the US) does not mean that your government will not tax the income that remains after you pay the US tax. However, if you stake your claim that your income is 'connected' to the US, and in addition you continue to invest in the US to make your business grow, then your claim becomes substantiated, and your government has no claim on any business investment, be it as capital or business-related expenses, 'connected' to the business, and neither will the US government.

http://www.irs.gov/businesses/small/international/article/0,,id=96696,00.html

It's pretty clear to me from the following link that income from sales of software is not really 'connected' income when you don't own any business assets in the US. But if you don't pay tax to the UK on the income, then you will have two governments after you, instead of none. (Even though the issue of 'connected' income is debatable, it doesn't much matter if you pay tax to the US government or the UK government, you are still more or less compliant to both).

http://www.irs.gov/businesses/small/international/article/0,,id=96409,00.html

Even if you have 'connected' income through ownership of more substantial assets in the US, you still might be able to avoid IRS claims on your income through tax treaties, in which case your government makes claims on the income, instead.

http://www.irs.gov/businesses/small/international/article/0,,id=96454,00.html

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Answer 2

K T

Level 7

23,895 points

Jan 13, 2012 8:49 AM in response to APW93

Being in the UK means you'll need to cover the VAT (17%?) to your govt. Apple doesn't track, collect nor distribute taxes related to your sales...that's your job.

This has been discussed in detail on the iOS Dev Center Forum, so you may want to move there and search existing threads, etc. in order to avail yourself of the most current infomation.

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Answer 3

mark133

Level 1

94 points

Jan 13, 2012 9:22 AM in response to mark133

I don't find the link to the iOS Dev Center Forum? Is that from the annual payment membership?

It appears that selling software into the US meets the conditions for VAT zero-rating, as I would expect.But I haven't read all through this link:

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfp b=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000130&propertyType=document#P2 02_16896

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