Digital VAT (Value-Added Tax) Fees
Under European Union law, when you sell a digital item that is downloaded automatically to a buyer living in the EU, VAT (a value-added tax) must be collected based upon the rate that is charged in the country where the buyer is located. To make this convenient for you, Etsy will automatically increase the amount charged to the buyer of the digital item to collect the correct amount of VAT, and Etsy will remit the VAT to the tax authorities. The amount will depend on the buyer’s country of residence.
If the sale was made through Direct Checkout, Etsy will collect the VAT amount from the buyer and pay the VAT to the relevant tax authority and you will not have to take any further action.
If the sale was not made through Direct Checkout, you will receive the additional amount paid by the buyer for VAT and you will need to pay that amount to Etsy, so that we can pay the relevant tax authorities. The VAT amounts will appear on your Etsy bill each month.
Important legal note: solely for VAT purposes, when you sell a digital item to an EU buyer, you are legally supplying the item to Etsy and Etsy will supply the digital item to the buyer.
You can learn more about VAT for digital items in this Help article.
Currency Conversion
All fees that appear on your Etsy bill are in US Dollars. If you list items in a currency other than US Dollars, your item price will be converted to US Dollars solely for purposes of calculating the transaction fee.
To avoid incurring foreign exchange charges, Etsy recommends you list your items in the same currency as your bank account. Buyers will see the items in the currency of their choosing. If you decide to list in a currency other than that of your bank account, you will be charged 2.5% over the current market rate to send funds to your bank account. Learn more about currency conversion here. Currency conversion is handled automatically by our payment processing service and further described in our Direct Checkout Policy.