Controversial changes to Etsy billing are coming

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The only marketplace Etsy has announced changes to how Etsy billing will work and it has been criticised by a number of merchants. In particular, news that they will be deducting taxes directly from payments made by shoppers is not proving popular.

You can read the full Etsy billing announcement called ‘Coming in June: Simpler shop finances’ here.

We’re making it easier to manage your shop’s finances by combining your payment account and bill so you see everything in one place. Starting in June, we’ll automatically deduct any taxes or fees you owe from the money you’ve made from Etsy Payments sales. Way simpler, right?
– Madison Kiani, Etsy

Obviously tax deductions via Etsy Payments is something that many sellers don’t want. But there are some other aspects to the new system. Etsy billing will start showing fees in more local currencies if you use Etsy Payments. For instance, merchants in Bulgaria, Croatia, Czech Republic, Hungary, Romania and Poland will soon see fees displayed in euros.

There’s a dedicated forum thread regarding the changes here. And if you process payments on Etsy, it will be a slighty different arrangement which is described in the announcement. There is also a detailed Q&A for sellers regarding the arrangements on the forum thread.

It’s fair to say that the news has created more fury than delight, as online chat shows. One Etsy seller said:

This is outrageous on your part. No one wants Etsy to deduct taxes or to do our bookkeeping for us. Many of us have run businesses for years and have our own systems and accountants assisting in our operations. Do not do this.
– Etsy Seller Janice Trane Jones

We’ll doubtless be writing about this again as the roll out in June get nearer and more information emerges. What do you think of the new system and how will you be affected?

5 Responses

  1. Editing hint: Proof read articles before publishing, rather than be a breathless rush to get them out.

    “The only marketplace Etsy has announced changes…”

  2. What tax deductions? VAT? American sales tax? Sounds complicated and expensive for UK sellers.

  3. The way I read it I was under the assumption that it was just going to deduct fees at source and as we were VAT registered it would be reverse charge a la Amazon or have I completely misunderstood it? I was thinking the tax side was more relating to sales tax in the US?

  4. The real annoyance is the way they use hipster talk to dress this up as it’s all for the benefit of the sellers. It’s not. It is to improve their cash stream and it will make accountancy much more tricky; they will daily charge the credit/debit card on file for renewal fees and promoted listing charges; so that means lots of potential small charges to the card that will be a nightmare to keep track of for the book keeping. Slow hand clap Etsy….. And, make no mistake; ebay will be watching this like a hawk and this WILL be implemented as soon as they can aswell.


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