How do I handle VAT on Etsy when using Printify and buying shipping elsewhere?

Hi! In most Printify + Etsy setups, you don’t “set up VAT” manually—Etsy (as the marketplace) usually calculates/collects VAT from EU/UK buyers at checkout for low-value imports, and then the key operational piece is making sure the shipment’s customs data is handled the right way (IOSS for the EU, UK marketplace VAT rules for Great Britain). Where people get tripped up is that Printify is the one actually shipping the parcel, so VAT/customs handling can differ from a “I’m packing and buying postage myself” workflow.

Here’s the clean way to think about it, and what to do.

1) First, confirm who is the “shipper of record”

• If Printify fulfills and ships the order (typical POD): you generally shouldn’t be buying shipping separately for those orders—Printify is purchasing the label and injecting the parcel into the mail/courier network. In that case, your “carrier” choice is whatever Printify uses for that route.
• If you truly ship yourself (you print/pack/label and hand to a carrier): then you are responsible for ensuring the carrier transmits marketplace tax IDs electronically where required.

If you tell me your country + whether Printify is “shipping with Printify rates” or you’re somehow supplying your own label to Printify, I can point you to the right branch.

2) What Etsy handles (and what you should NOT try to override)

UK (Great Britain) import rule (common Etsy POD scenario):

• For goods dispatched from outside the UK and package value (excluding delivery) ≤ £135, Etsy generally collects and remits UK VAT as the marketplace. You should not add extra VAT on top in your Etsy listing price as a separate “VAT charge.”
• For ≥ £135, Etsy generally does not collect UK VAT, and the buyer may pay import VAT/duties on delivery.

EU import rule:

• For goods dispatched from outside the EU and package value (excluding delivery) ≤ €150, Etsy generally collects VAT at checkout and the shipment should use an IOSS process so the buyer isn’t charged VAT again at delivery.
• For > €150, VAT/duties are typically collected at import (buyer pays on delivery), and IOSS isn’t used.

What you need to do in Etsy:

• Make sure your item “Ships from” / item location and processing/shipping details are accurate (Etsy’s tax behavior depends on what Etsy believes about where goods are dispatched from).
• Keep your listing price + shipping price honest (don’t try to “VAT-hack” by hiding value in odd places—customs and marketplace calculations look at the numbers differently).
• Add a short note in your shop policies/FAQ like: “Buyers may be responsible for import VAT/duties on orders above local thresholds. Etsy collects VAT on certain orders where required.” (This reduces angry messages/cases.)

3) What Printify handles (important for POD)

This is the part that surprises POD sellers:

• Printify may not be able to use Etsy’s per-order IOSS number on the parcel in the way Etsy expects when you ship yourself, because Printify is fulfilling via its own network and customs workflow.
• In practice, this can mean:
  • Etsy collects VAT from the buyer (marketplace obligation), and
  • Printify charges VAT to you on the production/shipping services in certain lanes (because VAT exists through the chain).

So your “VAT compliance” task becomes more about pricing/margins (so you’re not shocked by Printify’s tax on your costs) rather than “collecting VAT and remitting it yourself.”

What you should do in Printify:

• Enter any VAT IDs you legitimately have in Printify (if you’re VAT-registered somewhere relevant). Don’t enter random numbers.
• Watch the Printify order breakdown for VAT applied on production/shipping so you can price your Etsy listings with enough margin.
• If EU/UK VAT costs are killing margin, consider routing EU orders to EU print providers (so it’s not an import) or limiting destinations.

4) What your external shipping provider handles (only if you are the one shipping)

If you are truly buying labels outside Etsy and shipping yourself, then for EU shipments ≤ €150 you must use a carrier/postage method that can electronically transmit Etsy’s IOSS data (Etsy provides it per order). Etsy also warns not to print the IOSS number on the package; it’s meant for electronic customs data.

For UK ≤ £135, Etsy is the party responsible for VAT. Sometimes carriers ask for marketplace VAT references—follow the carrier’s format, but don’t “charge VAT again.”

5) A quick “do this now” checklist

• Decide which model you’re actually in: Printify-ships vs you-ship.
• In Etsy:
  • Confirm accurate dispatch country (don’t list “ships from EU” if it’s actually produced/shipped outside the EU).
  • Keep prices consistent (item + shipping) and don’t add separate VAT line items.
• In Printify:
  • Review VAT on your production/shipping costs and adjust margins.
  • Add VAT ID(s) only if you’re genuinely registered.
• Messaging:
  • Add a short import tax disclaimer for orders over €150 / £135.
• If you have significant EU/UK volume or you’re storing/printing inside the EU/UK, talk to a VAT pro—at that point you can cross into local VAT registration obligations that marketplaces don’t fully cover.

If you reply with (1) your country, (2) where Printify typically produces your EU/UK orders (US, EU, UK), and (3) whether you ever touch the parcel/label yourself, I’ll map your exact VAT flow for EU vs UK and the safest setup steps for your specific lane.