- Etsy generally handles IOSS for you on EU orders ≤ €150: it adds EU VAT at checkout, collects it, and remits it under Etsy's own IOSS.
- So a UK Etsy seller does not need their own IOSS number for Etsy sales.
- Include Etsy's IOSS details in your customs/shipping data so the parcel clears EU customs correctly.
- You only need your own IOSS for direct EU sales outside Etsy (e.g. your own Shopify store).
- Above €150, IOSS doesn't apply, normal import VAT + duty on delivery, even on Etsy.
What Etsy handles for you
Etsy is an online marketplace, so for EU consumer sales of €150 or less it generally takes on the IOSS obligation itself. In practice Etsy:
- Calculates and adds the destination country's VAT at checkout.
- Collects that VAT from the buyer.
- Remits it to the EU under Etsy's own IOSS registration.
The upshot: a UK Etsy seller does not need their own IOSS number for these marketplace sales, Etsy's registration covers them. This mirrors how marketplaces handle VAT generally.
Your job: include Etsy's IOSS data when shipping
The one thing you must get right is the customs/shipping data. For the parcel to clear EU customs without the buyer being charged VAT again, Etsy's IOSS number must be transmitted in the electronic customs data for the shipment.
- If you buy postage through Etsy, this is generally handled automatically.
- If you ship outside Etsy (your own courier account), you must include Etsy's IOSS details correctly in the customs declaration, follow Etsy's current instructions for how to obtain and enter it.
Get this wrong and the EU customer can be charged VAT a second time on delivery, even though Etsy already collected it, which causes complaints and returns.
When a UK Etsy seller still needs their own IOSS
Etsy's IOSS only covers your Etsy sales. You would need your own IOSS registration (via an intermediary) only if you also sell direct to EU consumers outside Etsy, for example through a separate Shopify or WooCommerce store.
So a seller who is Etsy-only does not need their own IOSS. A seller who runs Etsy and their own store needs their own IOSS for the own-store EU sales, while Etsy continues to cover the Etsy ones.
Records and your VAT return
- Keep records of Etsy-collected EU VAT. It is handled by Etsy, but you should still be able to show what was collected and remitted on your behalf.
- Do not include Etsy-collected VAT in your own VAT return. Like other marketplace-collected VAT, it is excluded from your output VAT, Etsy accounts for it directly.
- Above €150, IOSS does not apply even on Etsy, those orders go through normal import procedures with VAT and possible duty on delivery (see the €150 threshold).
If you sell across Etsy and your own store, an ecommerce accountant will keep the two VAT streams clean.