29 Dec Difficult decisions…
I’m forced to take this action by new European Union VAT tax laws that go into effect on January 1. Without going into too much detail (if you want details, google it – posts are everywhere!), I am not able to comply with the new laws. Unfortunately, Etsy and Craftsy do not allow me to block sales to certain countries. PayPal allows me to choose US only or everyone, so after January 1, PayPal payments from non-US accounts will be rejected. At first, I thought I would have to close my Etsy and Craftsy shops completely, but as the majority of my sales are to customers in the US, this allows me to keep them open for those customers.
|Third Street Neighborhood
This was a very difficult decision as I love that the quilting community is worldwide and it feels completely wrong to limit my sales to the US. Unfortunately, this is the best solution available to me at this time.
The new law currently affects digital sales only, however, in order to restrict my PayPal account, it must apply to my paper pattern sales as well. In addition, I will remove the option to pay by direct credit card from my Etsy shop to avoid EU sales by credit card.
I am hoping this is a temporary situation. I hope the EU adjusts the new law to include a threshold sales volume under which these laws do not apply. My understanding is that they have clearly stated that they will not do this. It would also help if Etsy and Craftsy were able to provide more specific and detailed information as to where customers reside. Although, even if this information was easily available, that still leaves me needing to keep track of 28 different VAT rates in the 28 EU countries and filing quarterly reports.
I am investigating other changes I can make to the way I sell my patterns online so that I can remove these restrictions and comply with the new law. Realistically, this will take at least several months as the situation continues to evolve.
To be clear, this does not affect my wholesale or distributor sales and shops can still purchase paper patterns from me the way they always have.
Two questions will inevitably come up: 1) How can the EU tell you what to do? and 2) How would they know if you sell a few patterns to EU customers so what are the odds of getting caught?
The EU has every right to make laws concerning trade that affects their citizens. As someone who would sell to their citizens, I must obey their laws the same way I expect them to obey ours when they sell to US citizens. It is about mutual respect.
This same respect does not allow me to ignore a law I don’t like. I don’t cheat or manipulate my US taxes and I won’t do that to another country either.
As I said, I am hoping this situation will be temporary. I imagine an enterprising individual or two will come up with a business solution for those of us in this situation! Thank you to each of you reading this for allowing me to do what I love!