Twitter vs Apple: What Is '30% Tax', The Newest Allegation By Elon Musk On iPhone Maker | Explained

Elon Musk has yet again made headlines after tweeting that Apple charges 30% tax on all its in-app purchases.

Twitter vs Apple: What Is '30% Tax', The Newest Allegation By Elon Musk On iPhone Maker | Explained

Ever since the world’s richest man Elon Musk took over Twitter, controversies have marred the micro-blogging site in different aspects. Obviously, with the addition of features like Twitter Blue, the new Twitter chief has made it evident that he is going to transform the social media app into a platform that allows everything, just to make it profitable. Whether it is the introduction of DMs, voice calling, or video calling, the reports have suggested that the platform could soon become an all-rounder app.

Recently, Elon Musk has again made headlines by tweeting about Apple's advertisements. Taking to Twitter, he said, “Apple has mostly stopped advertising on Twitter. Do they hate free speech in America?”

After a few minutes, he tweeted again saying that Apple charges a 30% tax on everything iOS purchases from the App Store. “Did you know Apple puts a secret 30% tax on everything you buy through their App Store?”

What’s Apple Tax And Who’s Supposed To Pay?

The tech giant Apple has a totally different business model. As per Apple’s official website, the first year a subscriber uses the service, developers are paid 70% of the subscription cost per billing cycle, and also deduct any applicable taxes. The net revenue rises to 85% of the subscription price, minus any applicable taxes after a subscriber has accumulated one year of paid service.

In other words, Apple retains 30% of the revenue generated by developers. The model is quite similar to that of Google; the only difference is that Google allows its users to download applications from third-party app stores whereas Apple does not.

So, it is clear that it is not a tax, it is a commission (for hosting the applications) that helps the California tech giant earn a handsome amount. Notably, if the total annual revenue of an app exceeds US $1 million (Rs 8.2 crore) then only it is supposed to pay 30%. If the earnings are less than $1 million then 15% is charged.

Can Twitter Be Removed From Google And Apple?

The answer to this question is ‘Maybe’. Looking at the history, these platforms have not thought before de-listing any applications, with Fortnite being a good example. However, the handsome amount of commission earned by the platforms by app makers could also be one reason for not removing Twitter from the Play Store (Google) and App Store (Apple), as it could earn them good revenues.

In a response to a Twitter user, Elon Musk hinted that if Google and Apple boycott Twitter he could soon launch his own smartphone series under any of his company's names. But let’s just think about it. On what UI will the phones run? It could be either Android or iOS which clearly kills the chances to do so.

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