Etsy is a popular e-commerce marketplace, that allows artisans and creative individuals to showcase their handmade products and make sales.
It offers an ideal platform for artistic entrepreneurs to market their unique products.
The appeal of Etsy lies in its user-friendly interface and developing community of buyers & sellers.
These features have made it the top choice for those looking to sell handmade goods online.
Like any business, Etsy sellers must meet specific legal requirements.
A common query among new sellers is whether they require an Australian Business Number (ABN) to sell on the platform.
Our blog post provides practical advice and answers your question about getting started as an Etsy seller.
What is an ABN?
An ABN is a unique 11-digit number that identifies your business to the Australian government, other businesses, and the public.
It is used for a range of purposes, including invoicing, taxation, and other legal and regulatory requirements.
Do I need an ABN to sell on Etsy?
The short answer is no, you don’t need an ABN to sell on Etsy. That said, certain circumstances may require you to get one.
Etsy operates as a third-party marketplace, meaning that it provides a platform for sellers to connect with buyers.
As such, Etsy itself doesn’t require sellers to have an ABN. However, if you’re selling goods on Etsy, you may still need to register for an ABN depending on your circumstances.
To learn more about this, it’s best to look into the specific requirements related to your situation further.
For example, if you’re selling items on Etsy as a recreational activity, then registering for an ABN isn’t mandatory.
According to the Australian Taxation Office (ATO), a hobby is something that you do for enjoyment or amusement, not to gain an income from.
Suppose you are an Etsy seller and you are selling items purely as a hobby. In that case, any income earned from it falls into the “hobby income” category subject to different taxation rules.
On the other hand, if you’re selling goods on Etsy as a business, you will generally need to register for an ABN.
The ATO considers a business to be any activity that is carried out to make a profit.
If you’re selling goods on Etsy to make a profit, any income you earn will be subject to the same tax rules as any other business income.
In addition to registering for an ABN, you may also need to register for other tax-related requirements, such as GST (Goods and Services Tax) or PAYG (Pay As You Go) withholding.
These requirements will depend on your circumstances, so it’s important to seek professional advice if you’re unsure about your obligations.
Also Read: Do I Need an ABN for Dropshipping in Australia?
Why might I want to register for an ABN?
Even if you’re selling goods on Etsy as a hobby, there are still some benefits to registering for an ABN.
For example, having an ABN can help you to:
Claim expenses: If you’re selling goods on Etsy as a hobby, you may still be able to claim some expenses as tax deductions. However, if you have an ABN, you may be able to claim a wider range of expenses.
Establish your business: If you’re planning to turn your hobby into a business in the future, having an ABN can help you establish your business and build your brand.
Access wholesale suppliers: Some wholesale suppliers in Australia may require you to have an ABN before they will sell to you at wholesale prices.
Also Read: Calculate the ROAS for Etsy advertising campaigns
How do I register for an ABN?
If you’ve decided that you need to register for an ABN, the good news is that the process is relatively simple.
You can register for an ABN online via the Australian Business Register (ABR) website.
When you register for an ABN, you’ll need to provide some basic information about yourself and your business, including:
Your details: This includes your name, date of birth, and tax file number.
Your business details: This includes the name and address of your business, as well as information about your business structure (e.g. sole trader, partnership, company, etc.).
Your business activities: This includes information about the goods or services you provide, as well as your expected annual turnover.
Once you’ve submitted your application, your ABN should be issued within a few minutes.
You can then use your ABN for all your business dealings, including invoicing, taxation, and other legal and regulatory requirements.
It’s worth noting that registering for an ABN is free. However, if you engage a tax professional or other service provider to assist you with the process, you may be charged a fee for their services.
What other legal requirements do I need to be aware of when selling on Etsy?
In addition to registering for an ABN, there are other legal requirements that sellers on Etsy need to be aware of.
Some of these requirements include:
Consumer law: As a seller on Etsy, you have certain obligations under Australian consumer law.
For example, you must ensure that your goods are of acceptable quality, fit for their intended purpose, and match any descriptions or samples provided.
You also need to provide accurate and complete information about your goods, including any potential risks or hazards.
Copyright and intellectual property: As a seller on Etsy, you need to ensure that you have the right to use any intellectual property (such as trademarks, logos, or copyrighted material) that is included in your products or listings.
You should also ensure that your products don’t infringe on others’ intellectual property rights.
Taxes: Depending on your circumstances, you may need to register for other tax-related requirements, such as GST or PAYG withholding.
You should also keep accurate records of your income and expenses, as these will be needed for tax purposes.
Shipping and returns: You should provide clear and accurate information about your shipping and returns policies, including any applicable fees or restrictions.
It’s important to note that these are just some of the legal requirements that you need to be aware of when selling on Etsy.
Depending on your circumstances, there may be other requirements that apply to you.
It’s a good idea to seek professional advice if you’re unsure about your obligations.
In summary, you don’t need an ABN to sell on Etsy, but you may need to register for one depending on your circumstances.
Etsy Australia FAQs
Do you have to pay tax on Etsy sales Australia?
- There are 2 taxes GST and Income Tax applicable to online sales in Australia including Etsy, Amazon, and eBay.
- If your turnover is more than $75,000/year, you’ll need to register for GST. And charge it on your sales to Australian customers.
- You may also need to pay income tax on your Etsy profits. This depends on your overall income and tax bracket.
