An Irish PAYE employee (designer) launching an Etsy store to sell digital art downloads to a global audience.
The Concern: “If I earn €50,000 in my day job and €5,000 on Etsy, will I be taxed at 40% on every sale? Do I need to charge VAT to a customer in Germany?”
Digital products are "delivered electronically with minimal human intervention," triggering
specific EU rules:
● The €10,000 Threshold: For cross-border digital sales within the EU, the threshold isn't
the standard €42,500—it is just €10,000. Exceeding this requires charging the VAT rate of the buyer’s country.
● The "Deemed Supplier" Rule: Etsy often collects and remits VAT for digital downloads automatically. The challenge is reporting this correctly so the seller doesn't pay tax twice on the same Euro.
● PAYE Interaction: The client feared their employer would see their private side-
business or that they would lose their €2,000 Employee Tax Credit.
We moved beyond basic registration to provide a 2026 Digital Tax Roadmap:
No. Your tax affairs are private between you and Revenue. Your employer only sees your total tax credits; they do not see the source of your other income.
In Ireland, your incomes are “stacked.” If your PAYE salary already uses up your 20% tax band (up to €44,000 in 2026), your Etsy profits will likely be taxed at the higher 40% rate, plus USC and PRSI.
No. You keep your Employee (PAYE) Tax Credit for your salary, and you gain the Earned Income Tax Credit (also €2,000 in 2026) to use against your business income.
No. Under “Deemed Supplier” rules, Etsy collects the VAT. However, you must still report these sales correctly on your tax return as “exempt” or “non-taxable” turnover to ensure Revenue doesn’t think you owe that money personally.
If you sell digital goods to EU consumers (outside of Ireland), you can charge Irish VAT (usually 23%) as long as your total EU sales are under €10,000. Once you cross that, you must register for VAT OSS and charge the rate of the customer’s country (e.g., 19% in Germany).
Yes. You can claim a portion of your electricity, heating, and broadband, as well as “Capital Allowances” (tax wear-and-tear) on your computer, tablet, and software over an 8-year period.
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Copyright 2025 FORTI | All Rights Reserved | Privacy Policy | Cookie Policy | Design and Developed by Salt Marketing