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Apple admits iPhone apps not suitable for business

Commercial programs are solely for non-commercial use

Designing a Defense for Mobile Applications

Apple is reminding customers that applications sold through the iTunes store are strictly for non-commercial use: business use is forbidden, which makes one wonder what that section of the store is for.

Apple certainly gives the impression that the iPhone is suitable for businesses, and the Business section of the iTunes Application Store lists 78 pages of apps that we presume are aimed at business use. This makes it all the more surprising that Apple advised one customer that: "The iTunes Store sells only to customers as end-users for personal, noncommercial use."

The issue arises thanks to Value Added Tax - a sales tax applied in slightly different ways across Europe. In the UK, and Sweden where the luckless customer is based, VAT is payable on luxury items* and is reclaimable by businesses: businesses don't have luxuries. But Apple won't provide a receipt in order to reclaim that VAT, on the grounds that iPhone applications aren't for commercial use and therefore can't be used by a business that would be allowed to reclaim the VAT.

The customer complained, as explained on his blog, and was told that "the specific terms of your agreement with Apple when purchasing from the iTunes Store is that the content may not be used for commercial purposes... any attempts to claim your purchases for tax reasons would be in violation of the terms of sale."

Sure enough, when we looked at the UK terms and conditions it clearly states: "Your license of Products as authorized hereunder permits you to use the Products only for personal, non-commercial use". Quickoffice could, we suppose, be used for your own documents, and PDF Reader to read books. But we would be hard pushed to understand why anyone would want a Sales Customer Relationship Manager for their personal, non-commercial, use.

We contacted Apple, who have yet to get back to us, but the most likely explanation for all this is down to where Apple does business and the complexity of dealing with different tax systems around Europe.

Apple provides most of its software download services from the Republic of Ireland, with its 21.5 per cent VAT rate. If one, as a UK-registered business, wishes to buy VAT-rated goods from an Irish supplier then one contacts that supplier and sends one's VAT registration number. That enables the supplier to zero-rate the transaction so no VAT is charged.

Our financially-astute contacts reckon Apple can't be arsed with all that, so are just banning business use of iTunes applications to make life easier for themselves.

Which begs the question: who is buying "Ring It Up, Point Of Sale" for their personal use, or is everyone just ignoring Apple's terms and conditions? ®

* With absurdly broad ideas of what constitutes a luxury, obviously.

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