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New European Union Rules on the Sale of Digital Items

Dec 22, 2014

by Nadine Heintz

Etsy.com handmade and vintage goods

On 1st January 2015, new regulations will take effect that will impact Etsy shops selling digital items to buyers in the European Union. Here’s a look at the changes and how sellers will be affected.

From 1st January, 2015, there will be significant changes to European Commission rules related to Value Added Tax (VAT) on sales of digital goods and services to consumers in Europe.

The new rules state that all businesses selling digital goods and delivering them electronically to customers in European Union member countries will be required to pay VAT based on the VAT rates of the country where the customer is located, not on the rates of the country where the business is located. If your shop is based outside of the EU, it is unclear how the VAT rules will be enforced.

Some Etsy sellers have asked if Etsy will be handling VAT payments on digital goods under the new rules. Historically, Etsy has acted as a venue on which individual entrepreneurs run their businesses, with Etsy sellers responsible for paying appropriate sales taxes for those businesses. We are treating VAT the same way, with sellers expected to collect and pay VAT.

We understand that the new regulations will be an added burden for shops that sell digital items and deliver them electronically to EU customers and we’re working on a tool that will make the process easier for you. We will be releasing more details in early 2015 and will continue to post updates here on the blog.

The EU is also attempting to make the VAT payment process easier by allowing businesses based in member countries to opt for simplified VAT registration and return filing, known as mini one-stop shop, or MOSS. Get more information about mini one-stop shops on the European Commission website.

Learn More

  • For more information about the new VAT rules, read this FAQ. Learn more about how VAT works on Etsy in this Help Article.
  • Go to the European Union Commission website for more information. If you are an Etsy seller based in the EU, look for information related to requirements specific to your country.
  • We encourage you to consult with a tax professional for specific advice about your business.

Updated on 23/12/2014:

We’ve heard your concerns about how the new VAT rules on digital items will impact your business. This is a complex issue that we are all navigating together; please know that we are actively working on some solutions to help. We realise that it would be more helpful to provide more specific information on some of the changes we’re making related to your concerns:

1) Providing information on buyer countries: Beginning in January, you’ll be able to verify the country of your buyers.

2) Control over where you sell items: We’ve heard from you that you’d like to be able to control the countries in which you sell digital items. We are looking into the feasibility of this and will update you in early 2015.

Some of you have also asked if the new VAT rules apply to digital items that are delivered to customers by email. At least in the UK, the government has taken the position that PDFs manually emailed by sellers are not covered by the new rules.

We will continue to provide updates as soon as we have new information.

Updated on 22/01/2015:

Based on clarifications we’ve received over the past month, we’ve decided to collect and remit VAT on behalf of Etsy sellers based in European Union countries who are providing digital goods to buyers in the EU via automatic download. For more information please read this post on the Etsy global blog – and if you have any feedback, please comment there, so we can collate all your comments. For sellers outside the EU, we ask for your continued patience while we determine what is required and how best to proceed. We hope to have an update very soon. Thank you!

2 Featured Comments

  • nadineheintz Admin

    Nadine Heintz from nadineheintz said 2 years ago Featured

    We've heard your concerns about how the new VAT rules on digital items will impact your business. This is a complex issue that we are all navigating together; please know that we are actively working on some solutions to help.

    We realize that it would be more helpful to provide more specific information on some of the changes we're making related to your concerns:
    1) Providing information on buyer countries: Beginning in January, you’ll be able to verify the country of your buyers.
    2) Control over where you sell items: We’ve heard from you that you’d like to be able to control the countries in which you sell digital items. We are looking into the feasibility of this and will update you in early 2015.
    Some of you have also asked if the new VAT rules apply to digital items that are delivered to customers by email. At least in the UK, the government has taken the position that PDFs manually emailed by sellers are not covered by the new rules.

    We will continue to provide updates as soon as we have new information.

  • nadineheintz Admin

    Nadine Heintz from nadineheintz said 2 years ago Featured

    Thank you for your patience! Please check out this update on the Seller Handbook blog: https://blog.etsy.com/en/2015/update-european-union-rules-on-digital-item-sales/

95 comments

  • pennydogaccessories

    Kerry Foster from pennydogillustration said 2 years ago

    Well I won't be selling with Etsy anymore when the physical goods aspect comes in during 2016 then and I won't be moving my patterns over here. I'm so angry at this legislation, it stifles small businesses, reduces availability to consumers and it's such a shame that the marketplaces aren't worried that they're going to lose a lot of their sellers in the EU and beyond. Silly silly Etsy, you're missing a huge opportunity.

  • VAT MOSS for online digital sales - what does this mean for my Etsy store? said 2 years ago

    […] down to us). Etsy will be providing further details in 2015 about how they’re handling this according to this post, though it seems a little late in the day. 4. It is not clear whether the online marketplaces and […]

  • Oliopix

    Oliopix from Oliopix said 2 years ago

    Thank you for finally making a statement on this important issue. Please can you tell us: 1. How you will provide two pieces of identifiable, verifiable information about each customer. At present, we only have one, which falls short of the EC reporting/record keeping requirements. Regardless of any other tools you provide, this needs to be addressed before the new rules come in on 1st January 2015. 2. Whether you have the necessary reserves to face the likely legal challenge from the EC, who have been quite clear that third-party marketplaces are liable for processing and paying the EU VAT on our behalf.

  • rolanddesigns

    Virginie Lykins from rolanddesigns said 2 years ago

    I'm a little disappointed ! If we remove the automatic download, and go back to email delivery then we are not caught in the EU VAT issue ? Sales went up when the instant download was installed, but now I guess I will have to go back to sending files manually !

  • rolanddesigns

    Virginie Lykins from rolanddesigns said 2 years ago

    I guess we are going to have to go back to sending files via email !

  • SusanRoseDesigns

    Susan Rose from SusanRoseDesigns said 2 years ago

    It's a disaster for me and I too am angry. As Etsy won't be supporting us I have already removed my digital downloads. I am concerned about 2016 but if they aren't going to support us there too, I guess I will have to close my shops. I was assuming and hoping that a venue like Etsy would be there for us to help this along, but it appears not. I see on F/B that there are MANY sellers now refusing to sell to the EU. Etsy could have picked up these sellers but it looks like they are happy to go without. Difficult times ahead.

  • TinTeddy

    Deborah from TinTeddy said 2 years ago

    Very disappointed indeed. Especially as it took you so long to basically say you aren't doing anything at all to help us :( Now we face a Christmas time changing our shops around.

  • kpacker2000

    Katie Packer from LollipopLettersCuts said 2 years ago

    I would be interested to know how you will fight this out with hmrc then, as according them you should be liable. And to be fair, all the research I've looked through as a 3rd party market place I would agree with them. You should be responsible.

  • craftylittlefoxltd

    Lisa Fox from Craftylittlefoxuk said 2 years ago

    HMRC have confirmed that as a third party platform, etsy are responsible, so they will pursue etsy rather than the seller for vat. So I will be carrying on as normal. My previous post was removed. Wonder why?

    • Natalie Wall said 2 years ago

      Hey there, looks like your previous comment is over on the global blog. We're not removing any comments and are reviewing all feedback, so that we can post a response. Thank you for your comment.

  • Stitchrovia

    Emma Congdon from Stitchrovia said 2 years ago

    Seeing as the new rules come into force on the 1st of Jan the fact that you are getting systems in place for "early 2015" is a shame. Is it possible to limit geagraphical regions we sell to until this mess is resolved? I sell mainly to the US and UK and really dont want to have to give up my automated downloads for the sake of the occasional EU sale.

  • hilltopcloud

    hilltopkatie from hilltopcloud said 2 years ago

    I've been a massive supporter of everything Etsy has done for my business, but this decision feels like a huge slap in the face to all sellers. If you knew this is the decision you were going to make why wait to announce it until now. Your meeting with HMRC was last week... Also, from everything I've read about the new legislation, Etsy is liable, especially if you act as payment processor as well.

  • EAGERforWORD

    EAGERforWORD from EAGERforWORD said 2 years ago

    Will this put an end to shop payment accounts for EU sellers, people keep mentioning HMRC but I thought Etsy was based in Ireland? After the extension to cover all sales Etsy could keep EU sellers if it enabled us to sell and NOT offer items for sale in our own countries.

  • mollyvanroekel

    Molly Van Roekel from DigitalPressCreation said 2 years ago

    I really wish this announcement had been made sooner. I feel really bewildered and overwhelmed about this right now!

  • melissabeth2

    Melissa Beth from CrochetByMel said 2 years ago

    Yeah looks like as of the first of the year my patterns will no longer be available to anyone outside the USA because this is another headache I don't need. What a shame. :(

  • thecyclingartist

    Tina Mammoser from GeologyArt said 2 years ago

    Historically, Etsy has acted as a venue on which individual entrepreneurs run their businesses, with Etsy sellers responsible for paying appropriate sales taxes for those businesses. We are treating VAT the same way, with sellers expected to collect and pay VAT. ____ However, this is contrary to everything HMRC has said about VAT MOSS. Saying that if the venue is responsible for delivery systems they are usually going to be the ones required to register and handle the VAT. Please respond to that? Since digital VAT will require UK/EU sellers to VAT register their *ENTIRE* business this adds 20% (in UK) to all our products online & offline. Can you please give us a way to opt out of instant digital sales to EU countries?

  • thecyclingartist

    Tina Mammoser from GeologyArt said 2 years ago

    EAGERforWORD - Etsy is based in Ireland, but the same rules apply across the EU. Some of us have talked to HMRC just because we're in the UK, but the way the rules are applied will essential be the same EU wide.

  • ShannaMicheleDesigns

    Shanna Michele from ShannaMicheleDesigns said 2 years ago

    As a US-based seller, I don't want to stop selling digital downloads completely (my other shop was just gaining some traction). Will Etsy work on finding a way to block EU member buyers? Just how we can set shipping profiles, I would think they could set something similar to filter EU countries? Does anyone know for sure if emailing files is ok? If we were to change all our files back to email rather than download would that work?

  • jeanpower

    Jean Power from jeanpower said 2 years ago

    Really etsy- removing posts because you don't agree with them!

    • Natalie Wall said 2 years ago

      Hey there, I can assure you we're not removing any negative responses - and having checked, it looks like your previous comment is over on the global blog. We're reviewing all feedback and will update shortly. Thank you.

  • nemeton

    Lynn Davy from nemeton said 2 years ago

    Thank you for at least answering us eventually. However, this in no way goes far enough. We need to know what form this 'tool' will take and how you plan to enable those sellers that stay with Etsy to comply with the new rules. You are missing a huge opportunity to pick up new business from all the formerly independent sellers who will now be looking for a EUVAT-compliant third party platform. And what happens when this rolls out to physical products too?

  • FinchFive

    Lesley Todd from TheDigitalFinch said 2 years ago

    Can anybody suggest any platforms that will handle the VAT for digital products?

  • mycutelobsterdesigns

    mycutelobsterdesigns from mycutelobsterdesigns said 2 years ago

    So what is the "tool" you're working on? Why can't you confirm what you are going to be doing and give a more exact date? Early 2015 means many, many businesses will already have given up and left. We fee-paying sellers need and deserve more than this.

  • chocolaterabbit

    Betsy from chocolaterabbit said 2 years ago

    Quote: "Historically, Etsy has acted as a venue on which individual entrepreneurs run their businesses, with Etsy sellers responsible for paying appropriate sales taxes for those businesses. We are treating VAT the same way, with sellers expected to collect and pay VAT." US sellers only pay tax for sales in their own state (so far). How is this similar to keeping track of multiple VAT fees and handling information for all members of the EU? If this is your decision please allow us to opt out of EU sales.

  • WingSmith2010

    Dee Wingrove-Smith from WingSmith2010 said 2 years ago

    Cheers Etsy, looks like my new website will be launching sooner than I planned.

  • LAMdesigns

    Laura Mason from themasonbee said 2 years ago

    In regards to not selling to the EU, can't remember the exact words by HMRC but Legally you cannot not sell to the EU to get round it.

  • Pininkie

    Tanya Stovold from Pininkie said 2 years ago

    Vacation mode for my store in the new year then. I may not be back.

  • modernfolk

    Jacob de Graaf from modernfolk said 2 years ago

    This is completely unhelpful, and to be honest, I'm quite disappointed in you for replying this slowly. HMRC has more up-to-date information here: https://www.gov.uk/government/publications/vat-supplying-digital-services-to-private-consumers/vat-businesses-supplying-digital-services-to-private-consumers As far as the research I have done, Etsy is responsible for calculating the VAT to be paid for shoppers - this is not the sellers responsibility. Furthermore, no real answers have been given to sellers' questions, neither have any solutions been given. How would you suggest these changes be calculated? Where do we get two pieces of evidence required by these new rulings? The way I see it, I will need to close my business and change it to the old-fashioned email system. VAT-MOSS really isn't an option for most sellers, as the paperwork is hideous, and small business simply don't have the resources to keep a paperwork trail for a £2.00 sale of a digital file... If things don't change soon, my small business will have to shut, as from 2016 even emailed out items will fall under the new ruling.

  • StarPictures

    Tony from StarPictures said 2 years ago

    You only need to register for VAT if your VAT taxable turnover is more than £81,000 (the 'threshold') in a 12 month period.

  • SixSkeins

    Steph from SixSkeins said 2 years ago

    No more instant downloads from me then. Ridiculous to have to step backwards in customer service terms because of this new tax rule. As far as I understand it refusing to sell to EU-based customers breaks other legislation. Also heard that emailing pdfs may still be classed as liable to this tax in some EU countries, not sure how to confirm that though. I was looking to expand my business but now it seems I may be closing down instead unless this ruling changes significantly within 12 months.

  • thepurplebutterfly

    thepurplebutterfly from thepurplebutterfly said 2 years ago

    Such a disappointment that such a large successful platform that built itself on community now shows such disregard for its sellers, firstly by taking so long to make a formal statement about its position and secondly by not taking any responsibility for the new VAT arrangements. Shame on you Etsy!!! Even smaller platforms such as Payhip and Digital Goods Store are making changes to their business model so they can take on responsibility for VAT for their sellers - and no doubt they'll be taking away much business from Etsy too!!! What are you planning to do when the new VAT laws are introduced for physical products in approx 12months time? In the meantime, I suggest you read the EU legislation and explanatory notes a little more closely. They overrule any advice you have received from HMRC and very clearly indicate that your platform is responsible for collecting and paying VAT.

  • AbsolutelyStationery

    Jo from AbsolutelyStationery said 2 years ago

    Tony not for digital products/services. Thresholds do not apply. They also won't apply in 2016.

  • JudesDesigns

    Jude from JudesDesigns said 2 years ago

    A temporary workaround setting is needed where the seller opts to send selected EU orders by email and other worldwide orders by instant download. {Tony – you need to be registered for VAT to apply for MOSS}

  • Orathty

    Andreia Silva from MoonFlowerDigistamps said 2 years ago

    Really disappointed with Etsy position! Sadly my shop will enter on vacations mode at January 1st because I really cant handle all that Vat and paper work for a £2.00 sale of a digital file. Specially when there's no profit from me, my shop is new and I don't sell enough for all this mess. Really hope that Etsy is happy with their position. It will cost them a lot of sellers.

  • evaferguson2010

    Eva from HandmadeByEvaRose said 2 years ago

    This is another bureaucratic law designed to collect money for the EU without thinking through the implications for actually running the thing! What is the solution? A Dallas Buyer's Club set up where you sell a membership and the goods are free? I think retail shops are a bit unhappy about how online is taking over and they have lobbied to put stops on on-line sellers. The start of 2014, we got this new enhanced returns policy where unless you say otherwise in your store policies you had to pay the postage for returned items and refund the original shipping. Now this! This law does not have my vote!

  • anordicrose

    virginie lykins from anordicrose said 2 years ago

    Here is the official stand in Norway ( which is not EU, but loves to follow all EU rules... except for giving fishing rights.... ) It quite clearly says that ETSY would be responsible, since they store the files, and collect payment... especially when customers use instant checkout. ' If a supplier of electronic services delivers the services through the use of an intermediary, the intermediary shall be deemed to be the supplier. This means it is necessary to explain the distinction between the supplier and the intermediary: The difference will be based on an overall assessment of whether ‘the delivery takes place through the use of an intermediary’. It is not decisive whether underlying agreements between the parties classify the relationship as involving a subcontractor, intermediary, agent or commissioner etc. The definition of electronic services is mainly based on the delivery of the services. Who is contractually responsible for the content of the service is not necessarily decisive when assessing who must be registered. When deciding who the supplier is pursuant to the Value Added Tax Act, the most important factor is who is responsible for the actual delivery, i.e. who is responsible for transferring the files to the end user or gives the end user access to the digital content. Who collects payment from the recipient must also be taken into consideration. This provision means that those who sell electronic services through an intermediary cannot themselves be registered pursuant to section 2-1 third paragraph.' http://www.voesnorway.com/Legal-Information/

  • modernfolk

    Jacob de Graaf from modernfolk said 2 years ago

    Virginie - HMRC in the UK says the following in their documentation: "Digital portals, platforms, gateways and marketplaces If you supply e-services to consumers through an internet portal, gateway or marketplace, you need to determine whether you are making the supply to the consumer or to the platform operator. If the platform operator identifies you as the seller but sets the general terms and conditions, or authorises payment, or handles delivery/download of the digital service, the platform is considered to be supplying the consumer. They are therefore responsible for accounting for the VAT payment that is charged to the consumer." This clearly shows Etsy's responsibility.

  • CrossStitchCards

    Gail Pither from CrossStitchCards said 2 years ago

    Thank you for finally giving a response to this, Etsy. As you know, it has caused a lot of concern to sellers of digital products, myself included. Personally, I was delighted when Etsy started to offer digital downloads for sellers - less time spent emailing files or going to the Post Office with paper patterns to mail off. We were using technology to help us move forward and provide the product to the buyer quickly and efficiently. For me, I am now having to take a step backwards and either email files individually to customers, or spend time, money, and resources printing out paper patterns and going to the Post Office once again. This seriously cuts into my designing time, and I will be less productive. I agree with the general consensus, that Etsy was very slow to respond to our concerns about this issue, and that the response given was disappointing. Can you give us the facility to choose the shipping destination for our digital products. I need to be able to exclude the EU countries in my digital listings, and ship manually to them instead. This would be a good workaround for some of us at least.

  • bcheri

    Beth from PieceByNumberQuilts said 2 years ago

    Etsy appears to have published this article on the main blog as well as the UK blog -- there are many more comments on the main blog page: https://blog.etsy.com/en/2014/new-european-union-rules-on-the-sale-of-digital-items/ as well as a statement from Etsy that they are reviewing the comments and will respond further.

  • theproofangel

    Sarah Perkins from TheArtyCraftyAngel said 2 years ago

    As I understand this, vat is due if your turnover in that country is over their limits, and many countries have registration limits below the UK limit. Some countries have zero registration limits, so any digital sale to their residents is taxable. For example this applies to all sales in Spain. My understanding is that as we are all running our own businesses, we all have to account for our own tax. This is different from, say, selling a book on Amazon, where they make the sale & you get a part of it. Etsy needs to provide us with the relevant information for us to run our businesses, and they seem to be cutting it very fine indeed. How can people operate from 1st January if we don't know what is happening? It appears that anyone who is currently VAT registered should register with HMR&C for this MOSS idea. Goodness knows what an admin problem that is likely to cause, especially when we have no information from Etsy. I have a different problem. Etsy is a small part of my business. My main income stream is editing, mainly for small businesses and individuals. If I register for VAT so I can use MOSS, I will have to choose between raising my prices by 20%, or taking a big drop in income by paying the vat myself. Neither of these is practical. The feature I need is to be able to stop digital sales to customers in certain countries. We can choose which countries we ship to, so something similar should be possible. The list of VAT registration limits is available on line. I need to be able to block digital sales to countries where the low limit will cause me problems, and monitor progress against the other limits, so I can block them if necessary. I'm really lucky, because my digital products are in their early stages, and I'd been diverted into other projects. Nothing more will be happening on those lines until this is sorted. It is a real shame. This legislation is intended to tackle the likes of Amazon, who have been selling from low VAT countries. It is looking as though the only option for me might be to sell my digital products on Amazon.

  • TheFeminineTouch

    Sandra from TheFeminineTouch said 2 years ago

    and other web sites selling digital downloads on our behalf are actually taking this very seriously and are going to be responsible for the VAT payment.

  • TheFeminineTouch

    Sandra from TheFeminineTouch said 2 years ago

    2 blogs here that might be helpful http://knittyblog.com/2014/11/www-vatmoss-and-what-it-means-for-knitters/ http://www.woollywormhead.com/blog/2014/11/23/new-eu-vat-law-an-important-notice.html

  • TheFeminineTouch

    Sandra from TheFeminineTouch said 2 years ago

    http://www.woollywormhead.com/blog/2014/11/23/new-eu-vat-law-an-important-notice.html

  • natwonderwall Admin

    Natalie Wall said 2 years ago

    Thank you for your comments. We are reading them and putting together responses, which we will post back here, as well as the global blog.

  • vineettandon

    VINEET TANDON from PANKHURIART said 2 years ago

    I have started buying digital prints from so many etsy sellers from u.s. and EU countries for my little shop making origami items . What impact will it have on my purchases? If it is paying little more its OK , digitals files by mail is also Ok. My cooperation is with the etsy sellers and all those buying should also cooperate. taxes are imposed by the govt.s all over the world so pl. donot be disappointed

  • TheFeminineTouch

    Sandra from TheFeminineTouch said 2 years ago

    The HM revenue and customs site issued a flowchart which says Do you only sell your eservices through a third party platform or marketplace? (For example not through your own website?) if the answer is "Yes" , then The rule changes don’t apply to you This is because the rule changes apply to Etsy not us individuals , its etsy that is selling the pdf's on our behalf. you can get the flowchart here - https://www.gov.uk/government/publications/vat-supplying-digital-services-to-private-consumers

  • derekbull

    sheree armon said 2 years ago

    So if there's literally thousands of sellers on on Etsy, how is HMRC going to check whether some young designer called 'Jenny' for example, has charged an extra 20% on her £3 sale and paid the VAT to the government?? They're not. They'll be collecting it directly from Etsy on sales overall, and Jenny will be responsible for her own affairs, and telling the accountant that 20% of that sale went to the government via Etsy.

  • svartlilja

    Lina from svartlilja said 2 years ago

    EU business is getting less and less profitable: besides paying charges to etsy and paypal you have now also deal with all these crazy taxes, return / refund rules and insanely high postage prices. For sure we are only losing customers as for some US seller it will be almost 3 times cheaper to send an item to UK than to me from Holland!

  • nadineheintz Admin

    Nadine Heintz from nadineheintz said 2 years ago Featured

    We've heard your concerns about how the new VAT rules on digital items will impact your business. This is a complex issue that we are all navigating together; please know that we are actively working on some solutions to help.

    We realize that it would be more helpful to provide more specific information on some of the changes we're making related to your concerns:
    1) Providing information on buyer countries: Beginning in January, you’ll be able to verify the country of your buyers.
    2) Control over where you sell items: We’ve heard from you that you’d like to be able to control the countries in which you sell digital items. We are looking into the feasibility of this and will update you in early 2015.
    Some of you have also asked if the new VAT rules apply to digital items that are delivered to customers by email. At least in the UK, the government has taken the position that PDFs manually emailed by sellers are not covered by the new rules.

    We will continue to provide updates as soon as we have new information.

  • utterap

    Andrew from UtterApparel said 2 years ago

    Let's be realistic here. Each EU country's tax agency does not have the funds and resources to recover payments for every person/company who sell digital downloads to people living in its own country. So they will probably end up changing the legislation.

  • rosiepinkStudio

    Annie and Lyn from rosiepinkStudio said 2 years ago

    Let's hope so Andrew! It's a legislative mess. I'm still confused - hmrc say that Etsy is responsible for vat yet Etsy say the seller is. Hmmmm - I think I'll believe hmrc.

  • Absoknittinglutely

    Nadia Majid from AbsoKnittingLutely said 2 years ago

    Cross-posted on the globy Etsy blog: For those in the US who want to help the efforts already underway in the UK to minimise impact on small businesses, there is a petition to the White House that you can sign: https://petitions.whitehouse.gov/petition/call-european-commission-suspend-introduction-new-eu-vat-laws-micro-businesses/VH1P82X0

  • PrintableExpressions

    Marina from PrintableExpressions said 2 years ago

    Where did everyone's comments go???

    • Natalie Wall said 2 years ago

      Hi there, I just checked and it looks like you commented over on the US blog. We do not delete comments and are reviewing everyone's feedback to help shape our next steps. Thank you.

  • HandmadeHarbourDigis

    Wendy Massey said 2 years ago

    So, this looks like Etsy is deciding to completely ignore what the legislation is saying - that the platform is responsible for the EU VAT collections, not the individual seller. I can't quite believe that what you are telling us in this post is at complete odds with what government ministers are telling us. I sincerely hope you'll announce a U-turn on this, because the EU are unlikely to.

  • suzannepreston1

    Suzanne P. from PrestonSimplyNice said 2 years ago

    Wow ! This is heavy stuff..and has to be resolved within 4 days of the New Year Don't think so ... It does not affect my Shop for the moment because I am not in the digital business but ... I do have compassion for all of you involved . Good Luck ! our turn will come later ... just watch and see !

  • heartsandcraftsuk

    Claire from heartsandcraftsuk said 2 years ago

    Could someone explain to me how the physical goods act part of this fiasco will impact smal businesses like us? If I have to register for VAT then both myself and my partner, who is an artist, will have to stop selling all together, as there is no way we could afford to adhere to this new policy. I just think this another excuce we needed as a nation to leave the EU and just rule ourselves, as I was always under the understanding that the EU helped with free trade, not dictate to us how we sell.

  • Freelance (not quite) Friday – VATMOSS updates | Sally Jane Thompson's blog said 2 years ago

    […] sales, I was hoping Etsy might be one of the platforms to step up to the plate here, but – having released they’re statement - they’re leaving tax as seller’s responsibility, and that’s totally […]

  • matildasmeadow

    Caroline Brooke from matildasmeadow said 2 years ago

    There is no way in heaven's earth that small sellers such as myself will be able to deal with this on their own. Etsy needs to develop a system that implements VAT charges to relevant countries at the point of sale so that the price is adjusted accordingly BEFORE the buyer pays. We as sellers do not have the opportunity to do this. The whole idea is that we should be CHARGING VAT, not just paying it out ourselves. It's the CUSTOMER who will be paying. Therefore what we NEED Etsy is assistance, not just tools for blocking off countries and diminishing our business. I'm quite taken aback that you, as a company feel that this is a solution? Surely, you must realize that sales will go down, to Etsy's own detrement, if we start 'blocking' countries as you've suggested. And is not blocking particular countries grossly unfair to loyal customers in the EU, and against ETSY principles? The wording of the directive certainly indicates that some of the responsibility lays on the shoulders of those who administer and supply the provision of downloads. It reads very clearly that way to me. Real help is required here Etsy - come on, follow up on what you are supposed to stand for. Don't leave sellers in the cold on this.

  • EnglishNeedlecrafts

    Elizabeth Braun from EnglishNeedlecrafts said 2 years ago

    Well, I *was* going to start a business here. I guess I won't be now.... :(

  • Patterns4Pages

    Angela Jarmin from PatternsForPages said 2 years ago

    At the VERY MINIMUM can Etsy please provide us with the ability to choose to exclude selling to EU member countries. Simple 'This shop is unable to sell to EU Member Countries due to the new VAT rules' will suffice short term. I really don't want to close my shop when it is just taking off but I will as I won't be able to comply with the VAT rules.

  • mymanycrafts

    Sarah Harland from ReNaisVintage said 2 years ago

    I can't believe this is Etsy's stand. As others have commented the HMRC's flowchart clearly states that Etsy is responsible if we sell through a marketplace or third-party platform. I've put my shop on holiday mode and will be building my own website and finding other marketplaces like Folksy that seem to offer alternatives - we'll just have to go back to sending via email, but this is definitely not progress. It's such a shame!

  • kchenery

    Karen Barrett from PrettyPurplePlans said 2 years ago

    Etsy I have just received your email suggesting I am responsible for calculating and paying this VAT. I am informing you that as the legislation clearly states you as the marketplace are responsible, that is the stance I will be taking. It is not professional to try to email your way out of this, especially a few hours before it takes effect. I have only recently set up a shop and I wouldn't have done so if I had known about this sooner, I would have gone with one of your competitors.

  • BeadyNotions

    Donna Sanders from BeadyNotions said 2 years ago

    You're kidding, right? This email came through to my inbox with precisely 270 minutes to go until these new rules kick in and this is the first time you have made mention of it to your sellers outside of the Etsy forum - and even in the forum you have been largely silent on the subject. I'm sure my reply will get lost in the ether somewhere but if by some chance it does reach anyone that actually reads it I would like to point out that both my Etsy stores are currently on holiday and may stay that way indefinitely - or at least up to the point where you decide to take on the responsibility that other 3rd party platforms have done so as to enable your sellers to carry on their businesses with as little trouble as possible. It may surprise you to learn that not everyone has access to a team of accountants with tax knowledge, or the finances to be able to hire anyone to sort this out for them. Personally, I always sold through Etsy because it offered me the easiest way to do so. Now, it no longer does so I am looking into alternatives and I know I am not alone. I fear that Etsy will become a much smaller place from tomorrow. Whether that is just in the short term or not will no doubt depend on your response.

  • goldstarresouces

    goldstarresouces from GoldStarResources said 2 years ago

    I'm furious that Etsy seems to think that they don't have to follow the law in terms of third party and marketplace rules. This is the end of my shop, just as it was getting somewhere. I buy digital papers to create digital items to sell and as an EU member I can clearly see that blocking EU members is going to be very popular, so thanks Etsy. I will also be a part of the bizarre movement that will block EU purchases as an EU member. I hope the team has thought long and hard about all the business they will lose in this sneaky move. I hope the team has thought very carefully about their ethos, what they stand for and what their initial aims were. I'm sure it wasn't to be devious, sneaky and proactive in pushing customers (sellers) away.

  • Michelle118

    Michelle from WhispyWillowLane said 2 years ago

    Slowly moving my items over to payhip, it seems to be the best thing for me to do.

  • stitchedupbyleona

    Leona Angus from stitchedupbyleona said 2 years ago

    I do not intend to comply. I have changed my shop from digital downloads to emailable patterns, with the EU receiving a proof pattern followed by a paper pattern in the post. What I want is a tool that will allow me to sell instant downloads worldwide but excluding the EU and a physical item listing or custom listing for EU countries. Short of introducing a VAT threshold this is the minimum requirement.

  • danielarweiss

    danielarweiss said 2 years ago

    VAT is hardly Etsy's fault. The EU is simply killing business and once more politicians expect the general population to pick up the tab.

  • Michelle118

    Michelle from WhispyWillowLane said 2 years ago

    Changing my instant downloads to physical items, going back to emailing orders, very sad Etsy, do you really want to lose so many of your customers.

  • AwkwardSoul

    Char from AwkwardSoul said 2 years ago

    I've read on other sites that emailing the digital item COUNTS for VAT, so there's no way around it. http://ysolda.com/blog/2014/11/26/they-didnt-know-the-impact-of-vatmoss-on-really-small-businesses That said, I'm turning digital sales back on and raised all my prices to cover the tax. You should of had a system in place awhile ago to make this easier on sellers.

  • The VATMOSS VATMESS and Etsy | Little Squish said 2 years ago

    […] – 2/1/15: Disappointingly, it took Etsy until 22nd December to come out with this statement. As I predicted, Etsy have decided that the onus is on the seller to deal with the VAT. As Etsy […]

  • TheGraciousHare

    Patricia Vallina-Mackie from TheGraciousHare said 2 years ago

    what to say, this is very sad news. I have to think about my shops. I am not selling downloads but with all the EU vat changes planned for small business in particular on line businesses. I am back from the UK today and whilst I was there I was told the EU is looking at all online business and small guys to see how they can hit us. My son warned me to be very aware of new changes. If outside EU businesses stop selling into the EU there will be a great divide and etsy will feel the breakdown of an international community.

  • peblsrock

    Paula Newman from peblsrock said 2 years ago

    Fascinating to read all of these comments, most of which i wholeheartedly agree with. To be honest, EU legislation is a shambles, and i doubt if any of the smaller member states are geared up for this anyway, so i expect nothing less than an omnishambles. For my part, i'm happy to exclude the EU and sell only to the US and elsewhere - then wait for sanity to return. Doubtless there will be a test case in Brussels and the whole thing will be scrapped as a waste ot time and money. Who is going to employ people to chase up VAT on cheaper items? It makes absolutely no economic sense. I'm pretty sure that the residents of these member states will get wise to being indirectly taxed this way and no doubt there will be protests on the streets...

  • BoonPM

    Pamela Boon from OurVintageWardrobe said 2 years ago

    I haven't been in business for a few years however, when I last paid vat there was a hefty (ie £18,000) level before being lliable for vat. Surely there is still a similar rule in place (probably considerably more now).

  • janiej123

    Jane Allsop from JaredDesigns said 2 years ago

    My new business direction for 2015 was developing my own charts for stitchers to buy and download - looks like I'll have to find a new selling platform ...

  • CraftyRedman

    Debbie Redman from CraftyRedman said 2 years ago

    I've done some reading and per the following link the thresholds which are varied across the 28 EU states (now £81,000 in the UK Pamela!, but zero in Spain, Malta and Sweden) make no difference as there are NO distance selling thresholds for electronic services per the legislation that came into effect on 1/1/15. Knitting pattern downloads are specifically mentioned as an example of an electronic service, as its in essence being treated as a service due to the minimal human intervention required. So even the turnover from a pattern costing a couple of quid has to be tracked and reported quarterly via MOSS, and pricing reconsidered for VAT but we need some way to automate which rate since it will depend on the buyer each time… impossible to accommodate 28 states with different rates, rules and exemptions! My downloads are now deactivated as I've no way to filter who is buying them before they do so but very sad to have to do this. Link here: http://www.vatlive.com/eu-vat-rules/distance-selling-eu-vat-thresholds/

  • modernfolk

    Jacob de Graaf from modernfolk said 2 years ago

    @Pamela - The VAT cap currently stands at £81.000 - however, this does not matter a single bit when you sell to a different EU country, as your customer will have to pay his country's VAT in your shop. I wrote a blogpost which you can read at www.modernfolkembroidery.com (just go to the blog section). It has some (what I hope are) interesting links as well for you!

  • sarahcryer1

    Sarah Cryer from SarahCryerBeadwork said 2 years ago

    Etsy, in the spirit of your lovely 'no blame' culture, can we have a frank and honest chat? Or an update even - anything would help? Please don't just post and run, it really really winds us up........

  • Sarahjg69

    Sarah said 2 years ago

    Is it correct that the same law will also affect the sale of goods on-line from 2016?

  • jasonchuangkw

    Jason Chuang said 2 years ago

    Would there be a big loophole? If you are from EU, get a non-EU friend to buy the thing for you and then you pay your non-EU friend (transfer fund). Your non-EU friend will send over the digital file to you through the internet. So could this non-EU friend become a business?

  • thecathedral

    thecathedral from thecathedral said 2 years ago

    I'm really dissapointed there isn't going to be more support on this and will really affect my ability to trade at all if this is rolled out to physical goods next year. Please sign this petition on Change.org to help make sure it doesn't get that far; https://www.change.org/p/vince-cable-mp-uphold-the-vat-exemption-threshold-for-businesses-supplying-digital-products

  • squirrelli

    squirrelli said 2 years ago

    This is the email I got from HMRC (UK) "Thank you for your e-mail. We regard platforms such as Etsy as being responsible for the VAT on digital services supplied through their sites and we will pursue the matter with them and not the individual designers and artists who use the platform if VAT is not declared on such sales. In the unlikely event that this view should change I would expect the matter to be clearly communicated to all those affected, and we would only expect suppliers to apply VAT to sales made from that point onwards. I have attached a link to the latest guidance for your information. https://www.gov.uk/government/publications/vat-supplying-digital-services-to-private-consumers/vat-businesses-supplying-digital-services-to-private-consumers I hope this is helpful. Kind regards Des Desmond Farndell VAT Supply Team/ Indirect Tax Directorate/HMRC/100 Parliament St/London/SW1A 2BQ"

  • squirrelli

    squirrelli said 2 years ago

    I'm happy to start selling digital downloads as I have been told by HMRC that ETSY IS responsible for the VAT.

  • GradianceYarns

    Samantha from GradianceYarns said 2 years ago

    I once had this amazing business partner. They helped me set up my business from scratch, gave me tips and advice, promoted my products, filled in order and dispatch forms, processed the payments, assisted with the delivery, and obtained feedback for me. Then the EU threw a curve ball and all my partner did was duck and run away. My partners name: ???? I don't want those four question marks to be filled with Etsys name in a years time when this law expands to materials goods. Please, from the hearts of so many you have supported and encouraged over the years, step up to the plate, stand tall, take a hit and knock one out of the park! We need you just as much as you need us.

  • annemariesbreiblog

    Annemarie from annemariesbreiblog said 2 years ago

    @Etsy: it would be really nice to have an update on this matter. Are you working on a tool to make it possible for all of us to comply with these new rules? I see so many shops closing or shops stop selling digital items (that includes my own), you cannot just leave us here with no answers. Please give us an update?

  • A (small) spanner in the works! | Georgina Giles said 2 years ago

    […] while Etsy work on a solution, namely for sellers to choose which countries they can sell to, I will be printing out my patterns […]

  • pixieharmony

    Cindy from pixieharmony said 2 years ago

    Because the VAT tax doesn't seem to apply to e-mails with PDF's, I tried to change my listing to how it used to be, and delete the download feature. It would not allow me to save it in any way until I re-added the download feature. This is really a pain to edit each of these in the first place, but to have to delete them all and start over?? Help!

  • kandjdolls

    Sayjai from kandjdolls said 2 years ago

    @Etsy : when can i select the countries I like to sell? This would be great as I can limit to the US, Canada,...and exclude Europe.

  • nadineheintz Admin

    Nadine Heintz from nadineheintz said 2 years ago

    Thank you so much for your feedback. We know this is a frustrating situation. We have been taking all of your concerns and suggestions into consideration and will have an update to share with you tomorrow. Please check back then. Thanks again!

  • ljdickman1

    Lorna Dickman from Designedforyoubyme said 2 years ago

    Any word on the VAT statement yet?

  • ljdickman1

    Lorna Dickman from Designedforyoubyme said 2 years ago

    Do you know what time the statement is due please

  • nadineheintz Admin

    Nadine Heintz from nadineheintz said 2 years ago Featured

    Thank you for your patience! Please check out this update on the Seller Handbook blog: https://blog.etsy.com/en/2015/update-european-union-rules-on-digital-item-sales/

  • ninesensedesign

    James Olsen from NinesenseDesign said 2 years ago

    This is insane! I am in the process of opening up digital printables shop at the moment, but if I am going to be hung out to dry by Etsy living and selling in the US I am not sure what I am going to do. How anyone can apply their foreign tax statutes to people outside their own country astounds me. Etsy you need to get some commentary up on this as soon as possible! I need to know what costs if any are going to be passed along to me as a seller, and then I can decide how to proceed with my second shop. James Ninesense Design

  • raccoon906

    Tess from RaccoonsRags said 2 years ago

    Does Etsy allow us to sell PDF documents (sewing patterns etc) and send them to the buyer by email then? I'm not aware if that's possible?

  • Brodytrims

    Brody Trims from GlitterFabrics said 1 year ago

    Can't wait until the UK vote to come out of the EU, then we can trade with the US and not have all this bother from the Nanny EU state.

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