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What Apple changed in the EU
The rules are part of Apple’s Alternative Terms Addendum for Apps in the EU, introduced in response to the Digital Markets Act. Developers can remain on Apple’s existing App Store terms, or accept the alternative terms to use options such as Web Distribution, alternative app marketplaces and alternative payment processors or external purchase links. The alternative terms bring different commissions, reporting duties and technology fees. Apple’s current explanation is available at Apple’s EU app-distribution page; the European Commission describes the DMA distribution framework at its developer portal.
The CTF is therefore not a universal charge on every app installed outside the App Store. It is one component of a contractual model that developers choose if they want the associated distribution and payment options.
Who gets protection from the CTF?
| Developer or app | Main protection or exposure |
|---|---|
| Ordinary eligible app | First one million annual installs are not charged under the nominal CTF calculation. |
| Developer under €10 million in global business revenue with no prior app above one million first annual installs | Three-year CTF-free on-ramp after signing the alternative terms, subject to declaration and continuing eligibility. |
| Free app from a business with no business revenue and no monetization | Apple’s stated no-revenue exemption can remove CTF liability, subject to Apple’s rules. |
| Qualifying nonprofit, accredited educational institution or government entity | Exemption generally requires an approved Apple Developer Program fee waiver. |
| Alternative app marketplace | Marketplace app installs can be chargeable from the first install; the ordinary one-million allowance does not apply. |
Apple says fewer than 1% of developers using the alternative EU terms would pay the CTF. That is Apple’s estimate, not an independently verified market measurement.
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How “first annual installs” are counted
For iOS and iPadOS, a first annual install is generally the first installation of an app by a particular Apple account in the EU during a 12-month period. Apple’s definition includes initial downloads, qualifying redownloads after the relevant period, updates and installs through different channels when they are not duplicates for that account within the 12-month window. The same account installing the app on several devices does not create several chargeable events in that period.
- An App Store installation followed by an installation from an alternative marketplace within 12 months is generally one first annual install for that account.
- An update does not create another first annual install during the same applicable period.
- Automatic installs on macOS, watchOS, tvOS and visionOS are not counted as CTF first annual installs under Apple’s overview.
Apple documents the counting rules in its CTF overview.
The nominal CTF calculation
For an ordinary eligible app outside an exemption or on-ramp, the basic calculation is:
CTF = €0.50 × first annual installs above 1,000,000
| First annual installs | Nominal chargeable installs | Nominal CTF |
|---|---|---|
| 800,000 | 0 | €0 |
| 1,000,000 | 0 | €0 |
| 1,050,000 | 50,000 | €25,000 |
| 2,000,000 | 1,000,000 | €500,000 |
Apple generally invoices monthly using the applicable annual-install calculation rather than requiring the entire nominal annual amount at once. Its published example treats 50,000 installs above the threshold as €25,000 annually, or €2,083.33 per month. These figures illustrate the pre-transition CTF math; a qualifying developer may owe nothing during the on-ramp, and 2026 CTC rules can change the relevant obligation.
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The three-year on-ramp for small commercial developers
Who qualifies
- Global business revenue is below €10 million.
- No app associated with the developer has previously exceeded one million first annual installs in a 12-month period.
- The developer declares its revenue category before the app exceeds one million first annual installs.
- The developer accepts the applicable alternative terms.
The revenue test is global business revenue, not simply EU or App Store revenue. Apple’s materials indicate that physical, digital, advertising and other business income, as well as revenue from associated corporate entities, may matter.
How the period works
The on-ramp starts when the developer signs the Alternative Terms Addendum, lasts three continuous years and applies once per developer account. It does not restart when a new app is launched, and unused time is not preserved. Annual revenue declarations are required to maintain eligibility. Apple explains these conditions in its CTF documentation.
If the business grows
If global annual business revenue rises into the €10 million-to-€50 million range during the on-ramp, the developer can begin owing the CTF after one million first annual installs, but Apple caps that CTF at €1 million per year for the remainder of the three-year period. Once the on-ramp ends, the ordinary post-one-million-install rule applies unless another exemption or newer fee model governs.
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A free download can still be monetized. Apple’s no-revenue exemption is aimed at a developer with no business revenue whatsoever offering a free app with no monetization, including no advertising, paid digital features, subscriptions, physical sales or other commercial activity.
- A free hobby app with no ads, subscriptions or sales may fit the exemption.
- A free app earning advertising revenue does not fit the simple no-revenue description.
- A free app that promotes paid services or subscriptions may be commercial even if the download price is zero.
- Venture funding or other business activity means the developer is not automatically a “no-revenue business.”
Apple’s eligibility and waiver information is at its Core Technology Fee support page.
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Alternative marketplaces face the sharpest exposure
The developer of an alternative app marketplace can owe the CTF for every first annual install of the marketplace app, including installs before one million. That treatment is materially harsher than the ordinary app allowance. A marketplace operator must therefore model technology fees from its first users, alongside app onboarding, review and moderation, malware screening, refunds, customer support, fraud controls, security disclosures and compliance work.
This is why “Apple removed the sideloading tax for small developers” is misleading. Apple reduced exposure for many app developers, but it did not give marketplace businesses the same safe harbor.
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Declare revenue before crossing the threshold
Practical warning: Apple says a developer may lose on-ramp eligibility if an app exceeds one million first annual installs before the developer declares its revenue category.
- Calculate global business revenue for the relevant period.
- Include associated corporate entities where Apple’s rules require them.
- Declare the revenue category in Apple’s developer process, even before an app approaches one million installs.
- Sign the Alternative Terms Addendum if the alternative business model is appropriate.
- Monitor first annual installs in App Store Connect reports using Apple’s measurement guidance.
- Recheck eligibility and revenue annually.
What changes with the 2026 Core Technology Commission?
Apple’s EU documentation describes a planned move, by January 1, 2026, toward a single business model in which the CTF transitions to a Core Technology Commission for certain digital-goods and digital-services transactions. Apple describes the CTC as 5% on specified sales made by apps distributed through the App Store, Web Distribution or alternative marketplaces. It may appear separately or as part of another commission, and Apple identifies exclusions for some developers that have signed the EU alternative addendum. The terms also describe renewal for additional 12-month periods following further installs, including reinstalls, updates and restores.
Apple’s published material uses transitional language and indicates that further details would be provided. Treat the distinction carefully:
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- CTF: the nominal €0.50-per-first-annual-install charge above one million associated with the alternative terms and significant distribution scale.
- CTC: a percentage-based charge tied to certain digital-goods and digital-services transactions under newer EU terms.
The StoreKit external-purchase-link addendum and Apple’s current EU documentation should be checked before making a 2026 financial forecast.
Alternative terms versus staying with Apple’s existing terms
Developers can generally remain on Apple’s existing App Store business terms. That avoids the CTF framework but also means giving up the full set of alternative distribution and payment options. The alternative model is not automatically cheaper.
| Cost or obligation | Signal under Apple’s published alternative EU terms |
|---|---|
| Standard alternative-term commission | 17% |
| Qualifying Small Business Program developers and qualifying subscriptions | 10% |
| App Store payment processing | Additional 3% |
| Alternative processor or external website | No Apple payment-processing fee, but the provider’s own costs remain |
| CTF for qualifying ordinary apps | €0.50 per first annual install above one million, subject to exemptions, on-ramp and 2026 changes |
Apple lists these signals in its EU commissions, fees and taxes table. A realistic comparison must also include payment-provider charges, taxes, fraud, refunds, customer support, acquisition, compliance, security and marketplace costs.
Which path fits each developer?
Hobbyist or noncommercial project
A free app with no business revenue and no monetization has the strongest case for Apple’s stated exemption, even at high install volume. Keep evidence that the app has no advertising, paid features, subscriptions or other commercial income.
Small commercial app
A developer below €10 million in global business revenue should declare early, verify prior install history and model the full three-year window. The on-ramp can make alternative distribution viable, but it ends account-wide after three years.
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Developer seeking only external payments
Compare Apple’s commission and payment-processing savings with provider fees, tax handling, fraud exposure, engineering work and the CTC. Switching terms solely to avoid a hypothetical CTF may cost more than remaining on the existing App Store terms.
Marketplace operator
Budget CTF exposure from the first marketplace install and treat moderation, security, support and refunds as core operating costs. The one-million-install allowance for ordinary apps is not a marketplace exemption.
Does this affect developers outside the EU?
No. These alternative distribution rules are EU-specific. They do not generally change the economics for U.S. iPhone users or developers distributing only outside the EU. A developer serving EU users and other regions may need separate commercial and compliance models.
Bottom line for 2026 planning
Apple’s revised rules materially soften the CTF for many small developers: eligible businesses can receive a three-year on-ramp, genuinely noncommercial free apps can qualify for a no-revenue exemption, and ordinary apps have a one-million-first-annual-install allowance. But the safeguards depend on global revenue, prior install history, timely declaration and account-wide limits. Alternative marketplace operators remain exposed from their first install, and the emerging 5% CTC means the historic €0.50 figure should not be used as the whole 2026 cost model.
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