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How VAT Works on Etsy

VAT stands for value-added tax. It's a tax based on the consumption of goods and services that are commonly found in the EU and select other regions of the world.

VAT is also known as JCT in Japan and GST in New Zealand and Australia.

VAT may be charged to buyers on their purchases (“VAT on Items Sold on Etsy”) as well as to eligible sellers on their paid seller fees ("VAT on seller fees”).

VAT on items sold on Etsy

Am I required to charge VAT on my physical items?

Am I required to charge VAT on my digital items?

What should a seller invoice to a buyer look like?

VAT on seller fees

Shops based in the EU (excluding Ireland), Australia, India, New Zealand, Norway, Russia, and South Korea

Shops based in Ireland, Japan, South Africa, and Switzerland

Am I required to have a VAT ID?

How can I add or edit my VAT ID?

How will Etsy use my VAT ID?

Will I receive an invoice from Etsy for VAT on seller fees?

Note: What follows is general information. You should always contact your local tax authority or tax advisor for more information.



VAT on items sold on Etsy

Am I required to charge VAT on my physical items?

For information on VAT requirements in your location, please consult your local tax authority or a licensed professional.

If you are a VAT registered seller, you may be required to charge VAT on the items that you sell on the Etsy platform.

For EU countries, the applicable VAT rate depends on two things:

  • the nature of what is for sale and

  • the country in which the supply of goods and services is taxable with VAT

When supplying goods and services in the EU, the applicable VAT rates can be checked on the European Commission's website.

Note: Etsy displays copy next to an item’s price to buyers located outside the US and Canada that indicates that the price includes VAT (where applicable). If you are required to charge VAT on the items you sell, it is your responsibility to include applicable VAT in your listing prices on Etsy.

Learn more about how information about applicable tax is displayed to buyers on Etsy.

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Am I required to charge VAT on my digital items?

Etsy automatically collects and remits VAT on digital items purchased by buyers in Australia, the EU, India, New Zealand, Norway, Russia, South Africa, South Korea, and Switzerland. If you sell digital items, no matter where your shop is located, buyers in Australia, the EU, India, New Zealand, Norway, Russia, South Africa, South Korea, or Switzerland will be charged VAT.

Learn more about how VAT works for digital items.

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What should a seller invoice to a buyer look like?

Some businesses in the EU may need to provide an invoice when supplying goods or services. For further details on the invoice and these requirements, please find more information on the European Commission's website.

Additionally, we recommend that you check whether your invoices comply with the local invoice requirements.

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VAT on seller fees

Depending on your business status and location, Etsy may be required to charge VAT on seller fees accrued each month and remit it to the relevant tax authority. See below for details.

Shops based in the EU (excluding Ireland), Australia, India, New Zealand, Norway, Russia, and South Korea

  • Sellers in these countries, who submit a VAT ID to Etsy, will not be charged VAT on seller fees.

  • Shops in India, New Zealand, Norway, Russia, and South Korea that have filed a VAT ID with Etsy before March 28, 2017, will have access to invoices starting with the month they added a VAT ID to their account.

  • Sellers in India, New Zealand, Norway, Russia, and South Korea who file a VAT ID with Etsy on or after March 28, 2017, will receive their first VAT invoice from Etsy on April 1, 2017.

  • Sellers in Australia who file an ABN with Etsy on or before 28 July 2017 will receive their first GST invoice from Etsy on 1 August 2017.

  • For sellers in these countries who have not submitted a VAT ID to Etsy, applicable VAT charges will appear on your monthly bill.

  • The bill you receive on the first of the month will reflect any charges from in the previous month.

  • You will also receive another monthly invoice on the first of the month. This one will have a list of VAT-eligible seller fees and the amount charged on those fees during the prior month.

  • If you received a VAT credit during a month for a charge that was in a previous month, you will also receive a credit note along with your invoice on the first of the month. For example, if you sell a listing in June, and then cancel the order in July, the VAT you were charged in June and refunded in July will be reflected in the credit note issued for July’s transactions.

  • Some areas are exempt from VAT. We are aware of these exceptions and are working on a solution for sellers in these locations.

  • Etsy is also required to collect GST on Etsy Payment fees for Australian sellers.

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Shops based in Ireland, Japan, South Africa, and Switzerland

Etsy is required to charge VAT on applicable fees regardless of whether you’ve submitted a VAT ID to us. Your bill will reflect any charges from the previous month. You will also receive a monthly invoice on the first of the month that includes a list of VAT-eligible seller fees and how much you were charged on those fees during the prior month.

If you received a VAT credit during a month for a charge that took place in a previous month, you will also receive a VAT credit note along with your invoice on the first of the month. For example, if you sell a listing in June, and then cancel the order in July, the VAT you were charged in June and refunded in July will be reflected in the credit note issued for July’s transactions.

You can find the current VAT rate for Irish sellers here.

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Am I required to have a VAT ID?

A VAT Identification Number (VAT ID) is used to identify individual businesses for the collection of taxes. Etsy does not require sellers to have a VAT number to sell in our marketplace.

Businesses in certain countries may be required by their local tax authorities to register for a VAT ID if they reach their local country threshold. However, in some countries, you may also register for VAT even if you have not reached the threshold.

Because VAT laws vary from place to place, we’re unable to advise sellers on whether they need to acquire a VAT ID. If you have any questions about whether you need a VAT ID, please consult your local tax authority or tax advisor.

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How can I add or edit my VAT ID?

You can add or update your VAT ID by visiting You > Account settings > VAT ID.

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How will Etsy use my VAT ID?

By providing a VAT ID to Etsy, you are establishing a business-to-business relationship between your shop and Etsy. This status and your business location determine whether or not Etsy will charge VAT on seller fees.

In some countries, Etsy has a reporting obligation to share your VAT ID, together with the total value of your seller fees applied for that period, with local authorities. Contact your local tax authorities for more information.

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Will I receive an invoice from Etsy for VAT on seller fees?

Etsy provides downloadable VAT invoices to sellers in Australia, the EU, India, Japan, New Zealand, Norway, Russia, South Africa, South Korea, and Switzerland.

VAT invoices will appear on the first of each month for the previous month’s bill.

Each monthly VAT invoice contains a summary of VAT-eligible fees (in USD) billed in the previous month.

Monthly VAT invoices arrive as downloadable PDF in English.

You can access the invoice on your desktop computer by visiting Shop Manager > Finances > Your bill. Once there, click on the month to get an invoice for that period. The download link will appear above the breakdown of your activity for the month.

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