A painter intends to sell his own paintings on Etsy

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Since his activity is not commercial in nature, he does not have to worry about registering a business. The painter works freelance.

In addition to registering a business, a seller on Etsy should keep an eye on the following legal requirements in addition to online law :

The homepage must be compatible with the provisions of the European General Data Protection Regulation. This also includes the imprint on your own website.
When creating the homepage and operating the Etsy shop, copyright must be observed.
In order to offer customers a better service, the seller provides appropriate information on delivery times and shipment tracking.
The Etsy shop operator publishes “General Terms and Conditions” and includes a cancellation policy. To support this, he sets up a cancellation form on the homepage.
What costs should be taken into account when opening an Etsy shop?
To sell on the platform, the operator of an Etsy shop must take the following costs into account:

Fees for setting up the products
Fees for transactions on the platform
fees for processing payment transactions
The individual steps of opening an Etsy shop
Opening an Etsy shop follows the following steps:

The seller registers on the platform and determines whether he is a commercial or freelance seller.
In order to organize the sale optimally, choosing the right country and currency is an important factor.
The seller then indicates how much time he invests in his activities on the platform. He can choose between full-time and part-time.
After deciding on a shop name, the operator finally determines the terms of payment.
The tax side of an Etsy shop
Anyone who sells something on a long-term basis and intends to make a profit must pay taxes on the income generated. The tax side of an Etsy shop relates to the following taxes:

income tax
trade tax
sales tax
income tax
The income that the seller generates on the Etsy platform is subject to income tax. However, if the income is below the basic allowance and no other taxable income is generated, the tax office does not impose any taxes. For 2023, the basic allowance is €10,0908. However, the non-imposition of tax does not release the Etsy shop operator from filing an income tax return.

If higher income is generated, the seller enters this either as income from a business or income from self-employment (in the case of freelance or artistic activity) in his tax return. To do this, he prepares an income surplus statement and attaches the EÜR form to his tax return. In this income surplus statement, all costs associated with running the Etsy shop can be claimed as operating expenses that reduce profits. The resulting profit is identical to the income.

Additional allowances can be claimed in the income tax return. In addition to the child allowance and the special allowance, these also include the relief amount for single parents.

trade tax
If the Etsy shop operator carries out a commercial activity, his profits are lebanon gambling data also subject to trade tax. As a sole proprietor, however, he benefits from the trade tax allowance. This is currently €24,500. If the seller has determined a lower amount with his Etsy shop, he will not be assessed for trade tax. He is, however, obliged to submit a trade tax return to the tax office.

Anyone registered on Etsy as an artist or freelancer does not have to file a trade tax return or pay trade tax to the tax office.

sales tax
Ultimately, operating an Etsy shop also incurs sales tax. Depending on what is being sold, the Etsy shop seller must add the standard tax rate (19%) or the reduced tax rate (7%) to the net value of their products.

At the end of the year, the online shop operator submits a sales tax return to the tax office. During the year, he submits a sales tax advance return to the tax office - monthly or quarterly . In this, he enters the sales tax collected and his input tax amounts.

If the Etsy shop operator meets the requirements of a small business, he can apply for this at his tax office. The condition for applying the small business regulation is that the total turnover of the online shop in the previous calendar year was less than €22,000 and is not expected to exceed the limit of €50,000 in the current calendar year.

As a small business owner, an Etsy shop owner is not allowed to show sales tax on their invoices or deduct input tax from their incoming invoices. They are obliged to submit a sales tax return.