Is Apple the merchant of record for an App Store sale?

Apple never uses that phrase in its own documents, and the words it does use are more precise. Schedule 2, Section 1.1 has you appoint Apple as your agent in the regions on Exhibit A Section 1, and as your commissionaire in the regions on Exhibit A Section 2. The agreement defines a commissionaire as an agent who purports to act on their own behalf and concludes agreements in his own name but acts on behalf of other persons, as generally recognized in many Civil Law legal systems. So in the European Union and much of Asia and Africa, Apple Distribution International contracts with the customer in its own name, which is the closest thing to merchant of record that Apple actually commits to. In the United States, Canada, Japan, Australia, New Zealand and Latin America, Apple is a plain agent and the sale is yours.

What does Google Play say about tax on physical goods sold outside Play billing?

Nothing, and that is the answer rather than a gap in our reading. Google Play's Payments policy puts purchases or rentals of physical goods, such as groceries, clothing, home appliances or electronics, outside Google Play's billing system, along with physical services like transportation, airfare, gym memberships and food delivery. Every tax statement Google publishes is then scoped to a purchase made either through Google Play's billing system or through an alternative billing system. The Developer Distribution Agreement, effective 15 September 2025, defines Products as software, content, digital materials, and other items and services as made available by Developers via the Play Console. A box of coffee charged on your own processor is not one of those, so Google is neither the taxable supplier nor the party with an input. The whole obligation is yours.

Does the store's price include the tax?

In the regions where the store remits, yes, and that is why your proceeds move when a rate moves. Apple calculates proceeds as the customer price minus applicable taxes and then minus its commission, and Section 3.5 of Schedule 2 says Apple deducts its commission and the taxes it collected before remitting the remainder to you. Google's rate page says that in tax-inclusive countries all taxes, including VAT, must be included in the price, and that the rate set in Play Console is applied to your existing tax-exclusive prices. The practical reading: a VAT rise in a country you sell into is a pay cut unless you raise the price there.

What is a tax category and why does it change the rate?

It is the one tax input you control, and both stores make you own it. Apple's tax calculation service uses your category selection in App Store Connect along with app metadata, legal entity status, tax registration status and customer attributes to compute tax where taxes are administered. Apps default to the App Store software category. Google's default is Digital App Sales, code PTC023DIG, applied to every SKU until you pick something else from its list of 27 categories. The categories exist because many countries tax an e-book, a newspaper or a streamed video at a different rate from software, so the wrong category means the wrong rate on every sale until you fix it.

What happens if I pick the wrong tax category?

You carry it, and the agreement is blunt about that. Section 3.2 of Schedule 2 says you are solely responsible for selecting and maintaining accurate inputs for tax categorization, that if a tax authority deems your categorization inaccurate you are solely responsible for the tax consequences, and that Apple may hold amounts owed to you in trust until you correct it, then deduct any penalties and interest resulting from the inaccuracy before remitting what is left. The same section has you indemnify Apple against claims by any tax authority for underpayment or overpayment. Google's version is shorter and points the same way: adjustments to a category take effect only for future sales, so a wrong category is never fixed retroactively on either store.

Do I have to register for VAT or sales tax if the store remits it?

Not for the store's sales in the regions it covers, which is the point of the arrangement. Two things still catch people. First, the footnotes: in roughly 17 of the 94 regions on Apple's Exhibit B the cover is partial, and several read solely applicable to non-resident Developers, meaning Apple does not collect and remit for developers local to that country. If you are an Italian company selling in Italy, read your own row rather than the headline. Second, remitted consumption tax has nothing to do with income tax. Your proceeds are still revenue, and both stores make you complete their tax forms before they will pay you at all.

Does an alternative billing system change who handles the tax?

Yes, and it flips the answer rather than softening it. Google states that for purchases made by customers using an alternative billing system, you are responsible for determining, charging and remitting the sales tax or VAT due on the transaction to the relevant authorities, and it publishes that country by country, including for the user choice billing pilot in the European Union. The convenience you lose is larger than the service fee you save, so price the bookkeeping before you switch. Google also notes that where it is the responsible party you cannot adjust the rate, which is the mirror image of the same rule.

Articles · GuidesUpdated October 2026

On a store sale the store remits the tax, and the trouble starts the moment you charge outside it.

Apple collects and remits sales tax and VAT on App Store sales in the 94 regions listed in Exhibit B to Schedule 2 of its developer agreement, and says plainly that outside that list the job is yours. Google does the same thing through a different door: it handles tax on purchases made with Google Play's billing system in the countries and US states it names, and hands the work back to you for an alternative billing system. Anything your app charges for that never touches store billing, a shipped product, a haircut, a delivery, sits outside both schemes entirely. Every figure and sentence below was read from Apple's and Google's own documents on 16 October 2026.

What follows is who is appointed as what, where each store's cover stops, the footnotes that take it away again in your own country, and the one tax input you are on the hook for even when somebody else does the remitting.

Start here

The short version

The rail decides the tax, not the product.

Both stores work the same way at the top level. You appoint them to sell on your behalf. They set the tax on the customer price, they take it out before they pay you, and they send it to the tax authority in the places they have told you they cover. You never touch that money. What you do touch is one input, the tax category, and that input is yours whatever happens next.

Then there is the other half of the app, the part the store never processes. Charge for a delivery, a class, a repair or a box of beans and no store is in the transaction at all, so no store remits anything. This is one of the few running costs that never shows up in what an app costs to maintain, because the tax was never yours to spend. It just passes through, and the only question is whose hands it passes through.

Who actually collects the tax on an App Store sale?

Apple does, where it has said it will. The sentence that settles it is the first line of Exhibit B to Schedule 2: if taxes apply, Apple shall collect and remit to the competent tax authorities the taxes described in Section 3.2 of Schedule 2, for sales of the licensed applications to end users located in the regions that follow. We counted 94 regions in that list on 16 October 2026. The United States is on it. So is the United Kingdom, all of the European Union, Canada, Australia, India, Japan and Brazil.

Section 2 of the same exhibit is the part people never read. Apple shall not collect and remit those taxes for regions not listed in Section 1, and you shall be solely responsible for the collection and remittance of such taxes as may be required by local law. There is no third category. If your biggest market is not on the list, you have a filing obligation nobody will remind you about.

The phrase to drop is merchant of record, because Apple does not use it. Schedule 2, Section 1.1 has you appoint Apple as your agent in one set of regions and as your commissionaire in another, and the agreement defines a commissionaire as an agent who purports to act on their own behalf and concludes agreements in his own name but acts on behalf of other persons. That is the European Union, the United Kingdom, China mainland, Taiwan, Singapore and most of Africa, where Apple Distribution International or Apple Services Pte. Ltd. faces the customer in its own name. The United States, Canada, Japan, Australia, New Zealand and Latin America are plain agency, where the sale remains yours and Apple is simply the one holding the till.

Money-wise it comes out in one order, set by Section 3.5: Apple takes the price the customer paid, deducts the taxes it collected and its own commission, and remits the rest. Commission is 30 percent, or 15 percent under the App Store Small Business Program for developers with no more than one million dollars in proceeds in the prior calendar year, and 15 percent on auto-renewing subscriptions after a customer passes a year of paid service. For the two countries where you are most likely to be audited, there is a paper trail: App Store Connect publishes a monthly transaction tax report summarising sales tax, use tax, goods and services tax and other similar taxes applied on transactions in the US and Canada.

Apple Developer Program License Agreement, Schedule 2 and Exhibit B, read 16 October 2026

Check yours

Which rail, and whose tax

Tick what you charge for. The rail decides who handles the tax, so the two questions are really one question.

Nothing ticked. A free app with nothing to buy in it has no sales, so it has no sales tax and no VAT either.

What does Google Play do differently?

It starts from the opposite default. Google's own framing is that in some cases the seller is responsible and in others local laws shift the responsibility to Google. Section 3.5 of the Developer Distribution Agreement, effective 15 September 2025, says that except in certain countries and subject to certain conditions, you are responsible for transaction taxes on the sale of your products, and spells out the four parts: determining if the transaction is taxable, charging and collecting at the applicable rate, remitting to the tax authority, and providing any required documentation to the user or the authority.

In practice the exceptions swallow the rule for most sellers. Google takes responsibility for VAT on all Play Store purchases of digital content and services by customers in the European Union made with Google Play's billing system, and for sales tax in the US states it lists, and for VAT or GST in a run of individual countries from Albania to New Zealand. The qualifier in every one of those sentences is the same six words: using Google Play's billing system. Switch a purchase to an alternative billing system and Google says you are responsible for determining, charging and remitting any VAT or sales tax due on that transaction. If you are still choosing a rail, adding payments is the decision to make before this one, not after.

Two differences are worth knowing before you go looking for a screen that is not there. Google lets you enter a rate yourself where it is not the responsible party, with Play Console offering no tax, a Google preset rate, or a custom rate you type in. Apple has no such field: its tax calculation service works the rate out from your inputs and you take what it gives you. And where Google is responsible, it states that you cannot adjust the tax rate applicable to the transaction, which is the same wall from the other side.

The categories are the same idea on both stores with different names. Google ships 27 product tax categories and applies Digital App Sales, code PTC023DIG, to every item until you choose otherwise. Apple keeps your apps and in-app purchases on App Store software unless you change it. Both say an adjustment applies only to future sales. Both say they cannot give tax advice. Neither will tell you that you picked wrong.

Play Console Help, understanding your tax responsibilities on Google Play, read 16 October 2026

Does a physical good or a real world service change the answer?

It changes everything, and the first thing to be clear about is that selling outside the store is not a loophole you found. It is an instruction. App Store Review Guideline 3.1.3(e), read on 16 October 2026 in the guidelines updated 8 June 2026, says that if your app enables people to purchase physical goods or services that will be consumed outside of the app, you must use purchase methods other than in-app purchase to collect those payments, such as Apple Pay or traditional credit card entry. Must, not may. Put a shipped product behind in-app purchase and the app is wrong in the other direction.

Google says the same thing as an exclusion. Its Payments policy puts purchases or rentals of physical goods, such as groceries, clothing, home appliances or electronics, outside Google Play's billing system, together with physical services such as transportation, airfare, gym memberships and food delivery, and the payment of a credit card or utility bill. Those sales cannot use the billing system, so they never enter the machinery that collects and remits.

Which answers the question people actually ask: what does Google document about tax on physical goods sold outside Play billing? Nothing, and the silence is structural rather than an oversight. Every tax sentence Google publishes is scoped to a purchase made through Google Play's billing system or through an alternative billing system. Its agreement defines products as software, content, digital materials, and other items and services made available by developers via the Play Console. A crate of oranges is none of those. There is no tax category to pick, no rate to preset, no report to download. You, your processor and your accountant are the entire arrangement, and the tax usually follows where the goods go or where the service happens rather than where your company is registered.

One line in the guidelines catches more people than any other. Guideline 3.1.3(d) lets real-time person-to-person services between two individuals, naming tutoring, medical consultations, real estate tours and fitness training, use a payment method other than in-app purchase. The next sentence says one-to-few and one-to-many real-time services must use in-app purchase. So a trainer with one client can charge on a card, and the same trainer running a class of eight has to sell it as an in-app purchase, which moves the tax back onto Apple's list. Same trainer, same app, different rail, different tax authority.

Play Console Help, understanding your tax responsibilities on Google Play, read 16 October 2026

What is still yours when the store does the remitting?

Four things, and the first one is the only tax lever you own. You pick the category. Apple's tax calculation service computes tax in the countries and regions where taxes are administered using your category selection in App Store Connect plus app metadata, legal entity status, tax registration status and customer attributes. If that selection is wrong, Section 3.2 of Schedule 2 says you are solely responsible for the tax consequences, Apple may hold what it owes you in trust until you fix it, and it will deduct the penalties and interest caused by the inaccuracy before paying out the rest. The same section has you indemnify Apple against claims by any tax authority. Google phrases it as being solely responsible for providing and maintaining accurate inputs, and both stores apply a correction only to future sales.

Second, read the footnotes against your own country. Roughly 17 of the 94 regions on Apple's Exhibit B carry an asterisk, and several of them say the cover applies solely to non-resident developers, with Apple not collecting and remitting for local developers at all. China mainland is limited to certain taxes the Chinese government requires. Mexico splits by whether you are registered for VAT there. Uruguay is limited to certain taxes on digital transactions. A Thai company selling in Thailand and a Swedish company selling in Thailand do not have the same obligation, which is not something a summary page can tell you.

Third, consumption tax and income tax are different animals. Whatever either store remits for you, your proceeds are revenue and your own tax authority wants its own filing. Both stores make you complete their tax forms before they will pay you anything, and Apple's help pages carry country sections for Australia, Brazil, Canada, Ireland, Mexico, Singapore, South Korea, Taiwan and Thailand with extra forms or registration numbers attached.

Fourth, build the habit of checking. A wrong tax category is nothing like debugging a crash. Nothing breaks, no user complains, the charts look normal, and you find out years later from somebody with the power to charge interest. Put it on the same calendar as your annual accounts: read your region row, download the transaction tax report, confirm the category still matches what the app sells now rather than what it sold at launch.

Apple Developer Program License Agreement, Schedule 2 Section 3.2, read 16 October 2026

The same tax question, asked of each store

The question	App Store	Google Play	Same answer on both
What you appointed the store as	Your agent, or your commissionaire in civil law regions	Your agent or marketplace service provider	Yes
Who remits the tax on a store sale	Apple, in the 94 regions listed in Exhibit B	Google, in the countries and US states it names	Yes
Where the list of regions lives	Exhibit B to Schedule 2, updated via App Store Connect	A Play Console Help page, country by country	No
You choose the tax category	Yes	Yes	Yes
You can enter your own rate	No	Only where Google is not the responsible party	No
Tax on a physical good sold in the app	Not through in-app purchase, so never Apple's	Not supported by Play billing, so never Google's	Yes
A wrong category is your problem	Yes	Yes	Yes

Where this lands if a builder generated your app

Nothing about the tax changes because an agent wrote the code. The agreement is between you and the store, your name is on the developer account, and the tax category is picked in your App Store Connect and your Play Console. What a builder can get wrong for you is the rail, and the rail is what decides the tax. Ask for a paywall on a delivery app and you can end up with in-app purchase products behind something guideline 3.1.3(e) says must be charged another way. That is a review problem before it is a tax problem, and it feeds straight into rejection rates.

Newly is an AI app builder. You describe an app in plain English and it writes a real React Native and Expo project you own, runs it on cloud simulators while it builds, uploads iOS builds to TestFlight, publishes to Google Play internal testing, builds a standalone Android APK, and keeps a two-way GitHub sync so a developer can take it from there. It is $25 a month and there is no free tier. It does not submit to the App Store for you, because Apple requires the owner of the content to submit, and that same logic is why the tax answers are yours too.

The useful thing to do with a builder here is to be specific about what you sell. Say subscription and you get in-app purchase products and the store's tax machinery. Say the customer pays for a delivery and you get a card flow, which means a processor, a tax engine and a return address of your own. Describing it the wrong way round costs a rebuild of the checkout, which is the most expensive part of the app to change after launch. No tool files a return for you. Only you know which countries you are selling into and which rows of the list apply to a company based where yours is.

Questions people ask about tax on app sales

Apple does, in the regions it lists, and it says so in the agreement you accepted. Exhibit B to Schedule 2 of the Apple Developer Program License Agreement opens with the line that if taxes apply, Apple shall collect and remit to the competent tax authorities the taxes described in Section 3.2 of Schedule 2, for sales to end users located in the regions that follow. That list held 94 regions when we read it on 16 October 2026, including the United States and the United Kingdom. Section 2 of the same exhibit is the other half: for regions not on the list, Apple shall not collect and remit, and you are solely responsible for the collection and remittance of such taxes as may be required by local law.

Decide what you are selling before you build the checkout

Write down every thing a customer can pay for and mark each one store billing or not. That list is your tax plan, and it takes ten minutes now instead of a rebuild later.

Start building