How VAT Is Collected on Seller Fees

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

VAT is also known as JCT, GST, SST, or QST in some countries.

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”).

Learn how VAT works on physical or digital items.

This article contains general information. You should always contact your local tax authority or tax advisor for more information.

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Is VAT collected on seller fees?

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

Etsy may also need to collect VAT on Etsy Payments processing fees for sellers located in eligible Etsy Payments countries where required.

Learn how to add your VAT ID for your Etsy shop.

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 statement.

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

Prior to November 2018, fees on the invoices were based in United States Dollar (USD).

As of November 2018, fees on the invoices are based in the currency of your Payment account, in some cases may still be USD.

Monthly VAT invoices arrive as downloadable PDF in English.

You can access the invoice on your desktop computer by visiting Shop Manager > Finances > Payment account. 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.

VAT for shops based in Australia, Belarus, the EU (excluding Ireland), Iceland, India, Malaysia, New Zealand, Norway, Québec (Canada), Serbia, Singapore, South Korea, Turkey, Taiwan, and United Arab Emirates

If you haven’t submitted a VAT ID to Etsy

For sellers in these countries who have not submitted a VAT ID to Etsy, applicable VAT charges will appear in the current balance in your Payment account

You’ll receive a monthly invoice on the first of the following 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 have submitted a VAT ID to Etsy

If you added your VAT ID to your Etsy account, you won’t be charged. Instead, you will receive an invoice from Etsy on the first of each month stating that you were not charged VAT on your seller fees. You’ll have access to invoices starting with the month you added a VAT ID to your account.

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.

VAT for shops based in Ireland, Japan, South Africa, Russia, and Switzerland

Etsy is required to charge VAT on applicable fees regardless of whether you’ve submitted a VAT ID to us. Your Payment account 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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