Etsy and Irish VAT: The Good News
Since July 2021, Etsy is classified as a "deemed supplier" for EU VAT purposes. This means Etsy itself collects and remits VAT on sales to EU customers on your behalf. You do not need to register for VAT OSS (One Stop Shop) for EU sales ā Etsy handles it. This is the single most confusing aspect of Etsy for Irish sellers, and the answer is usually: Etsy sorts it.
When You Do Need to Think About Irish VAT
You need to register for Irish VAT only if your total business turnover exceeds:
- ā¬40,000/year for services (digital products, made-to-order items)
- ā¬80,000/year for physical goods
Most new Etsy sellers are well below these thresholds. If you approach them, consult an accountant ā the interaction between Etsy's deemed supplier status and your own VAT registration can be complex.
Declaring Etsy Income to Revenue
Etsy income is self-employment income for Irish income tax purposes. Revenue taxes your profit:
- Income: Total payments received from customers (Etsy deposits to your bank)
- Deductible expenses: Materials and supplies, Etsy listing fees (ā¬0.20 per item), Etsy transaction fees (6.5%), Etsy Ads spend, packaging, postage, equipment depreciation, proportion of home costs if you make products at home
- Profit = Income minus all allowable expenses
Setting Up Your Irish Etsy Shop
- Set your shop currency to EUR to avoid exchange rate complications
- Use an Irish bank account or Revolut Business for payouts ā fees are lower than some alternatives
- For digital downloads (printables, templates, planners, SVGs): zero postage cost, near 100% margins ā the most profitable Etsy category for Irish sellers
- Verify your identity with Etsy within the first few months ā you'll need PPS number details for higher-volume sellers
Common Mistakes Irish Etsy Sellers Make
- Not deducting Etsy fees as a business expense
- Ignoring the deemed supplier rules and manually adding VAT to EU prices (Etsy already charges it)
- Mixing Etsy income with personal bank transactions ā use a separate account from the start
- Not keeping download receipts for materials and digital tools
Does Etsy report my earnings to Revenue?
Etsy does not automatically report your income to Revenue in Ireland. You are responsible for declaring it. Revenue can access payment platform data in some circumstances, so always declare accurately.
Can I sell both physical and digital products on the same Etsy shop?
Yes. Many Irish sellers do both. Just track income by type ā the VAT treatment is the same (Etsy handles EU VAT), but your material costs differ significantly between digital and physical.
Do I need a business licence to sell on Etsy?
No licence is required. Register with Revenue for self-assessment once your net profit exceeds ā¬5,000/year, but no separate trading licence is needed for Etsy selling in Ireland.
Platform policies and Irish tax rules change. Verify at revenue.ie and etsy.com/legal.
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Disclaimer: This guide is for educational purposes only ā not tax, financial, or legal advice. Always verify current rules at
revenue.ie or consult a qualified accountant.