Etsy’s required to report tax information to local tax authorities in certain countries when sellers make more than the VAT threshold in sales on Etsy each year.
If you’re located in the EU, Norway, Switzerland, or the UK and your gross sales meet or exceed the local threshold in the calendar year, Etsy requires that you add your taxpayer name and VAT ID to your Etsy shop in order for you to continue selling on the Etsy platform.
For more information on VAT requirements in your location, please consult your local tax authority or a licensed professional.
How do I know if I’m meeting or exceeding the threshold?
As your shop is getting closer to the VAT sales threshold or local reportable threshold in your country, you will receive email reminders from Etsy to add your VAT ID or taxpayer ID to your shop.
If you don’t comply by the final reminder, you will see your selling privileges suspended. If your shop is suspended, you must enter your taxpayer name and VAT ID or taxpayer ID as relevant to be automatically reinstated.