Craft and vintage marketplace Etsy has clarified its position on the new EU VAT rules that came into force on 1st January.
They have announced that they will collect and disburse the VAT themselves on behalf of sellers. This new arrangement only stands for UK/EU based sellers and they will be making further statements regarding non-EU sellers. You can read the full text of the announcement here.
Etsy say: “Based on clarifications we’ve received over the past month, we’ve decided to go further and 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. If you’re based in the EU, that means you won’t have to process VAT returns on automatically downloaded digital items.
To be clear, your buyers will be paying VAT as part of their total purchase price. We will calculate the VAT based on the location of the buyer and determine the VAT at the time of sale. Etsy will then remit the VAT to the appropriate taxing authority as required. We’ll share the specific details of how we’ll handle the collection process as soon as possible (and well before the tax filing deadline).
