Etsy changed its sales tax tool for sellers, and it's causing some confusion among EU buyers, sellers are reporting. Etsy explained it has to comply with various international consumer laws that require listing prices of physical items sold by Etsy shops to be inclusive of value-added tax (VAT), goods and services tax (GST) and other local taxes.
"To enable our sellers to comply with these laws, we'll be removing access to the sales tax tool for sellers outside the United States and Canada by the end of May 2016," it announced
For shops based in the US, it explained:
"Shops in the United States will still be able to access the sales tax tool to set tax rates for US states, zip codes and zip code ranges. However, these shops will no longer be able to set tax rates for anywhere outside of the US. If you are based in the US and have previously set tax rates for locations outside of the US, these rates will no longer be applied after May 2016. Please remember that this is an optional tool and you can choose to list your prices inclusive of any local taxes instead."
Etsy has a guide to VAT
on this page, which explains: "Etsy displays copy next to an item's price to buyers located outside the US and Canada that indicates that the price includes VAT (where applicable).
On June 3rd, Etsy added a clarifying post
that includes the following statement:
"...Therefore, an EU buyer purchasing an item from a US seller will see copy after entering the checkout process that makes it clear that additional duties and taxes may still apply to their purchase. Sellers are not responsible for these additional import fees or taxes..."
However, sellers say buyers are confused, such as the seller who posted to the Etsy board today that they received a cancellation request from a UK shopper who had assumed the price included VAT since Etsy displayed her listing with the message "VAT included (where applicable)" directly under the price.
"I really hope Etsy wakes up and sees how confusing this wording is," one seller wrote. "The longer it's there, the harder the fallout will be when packages start arriving to international destinations with a vat/tax/fee bill."
Another said, "Below the green checkout button in the cart, for delivery to UK it states "VAT included (where applicable). Additional duties and taxes may apply." The most confusing change that makes absolutely no sense to me whatsoever, seriously could they just put nothing at all."
Let us know if you've been impacted by this change and what you're hearing from buyers. Will this cause you to limit your international sales?