Selling on Etsy from Lithuania: shop, fees and digital files

Etsy is a global marketplace for handmade goods, design and digital files. In Lithuania its name is searched for more than 22 000 times a month – mostly by buyers, but increasingly also by those who want to sell there themselves. For digital products Etsy is convenient because the buyers are already there, the file is delivered automatically, and the platform itself collects the VAT on digital goods.

This part of the guide covers how to open a shop from Lithuania, exactly how much Etsy takes from every sale, what restrictions apply to digital files and how VAT works.

What can be sold on Etsy

Etsy's Creativity Standards allow only items that the seller has made, designed, handpicked or sourced for creative work. Digital files fall into the “designed by a seller” category – this is the seller's original content sold as a digital download: a graphic design, an audio recording, a text document, a scan of your own artwork.

Important: AI use must be stated in the listing description. Etsy prohibits moving transactions off the platform.

How to open a shop from Lithuania

1. Create an account and choose “Sell on Etsy”.
2. Set the shop language, country and currency. Choose the same currency as your bank account – euros. Why is explained below.
3. Come up with a shop name.
4. Create your first listing: photos or mockups, title, description, price, the “Digital” type and the uploaded files.
5. Choose how you will get paid. Lithuania is among the countries where Etsy Payments works: buyers pay by card, Apple Pay, Google Pay or other methods, and the money is transferred to your bank account.
6. Enter a payment card for Etsy fees.

Etsy's rules provide that a one-time shop set-up fee may apply when opening a shop. Its amount is shown during registration, and once paid it is non-refundable. In certain periods Etsy may not charge this fee.

How much Etsy takes: all the fees

A few notes that change the calculation:

• Auto-renewal. After four months listings are renewed automatically and cost 0.20 USD again. In the listings manager this can be changed to manual.
• Offsite Ads. As long as you have sold for less than 10 000 USD within 365 days, you can opt out of Offsite Ads. Once you reach this threshold, participation becomes mandatory for the lifetime of the shop, but the rate drops to 12%.
• Regulatory fee. Etsy charges sellers in some countries an additional regulatory operating fee (for example, in France, Italy, Spain). Lithuania is not on this list.
• VAT on Etsy fees. The fees are stated excluding VAT. If you have not provided a VAT number, Etsy adds VAT to its fees. Once you provide the number, VAT is not charged, and you receive an invoice on the first day of every month.

Calculation example

Suppose you sell a template for 10 € and do not use advertising. The transaction fee is 0.65 € (6.5%), the payment processing fee is 0.70 € (4% + 0.30 €), the listing fee is 0.20 USD. About 8.5 € is left, from which you still have to deduct VAT on the Etsy fees if you are not a VAT payer. For cheap products the fixed 0.30 € part and the listing fee make up a large share of the price: on a 2 € file Etsy fees would eat up about a third.

If the same sale comes through Offsite Ads, an additional 1.50 € (15%) is deducted.

Digital files: limits and types

Etsy distinguishes two types of digital items:

• Instant download – a ready file that the buyer receives immediately after payment.
• Made-to-order file – you prepare it according to the buyer's details, upload it and complete the order; the buyer receives an email notification that the file can be downloaded.

If the product consists of more files, they can be put into a .zip archive. Always include short instructions for the buyer: how to open the file, which program to edit it in, in what format to print it.

VAT on digital goods

When a digital file with automatic download is bought by a buyer from the EU, the United Kingdom or other countries on Etsy's list, the platform itself determines the buyer's country, adds that country's VAT to the listing price and pays it to the tax authorities. Etsy states that sellers are not responsible for adding VAT to the prices of digital listings.

This means:

• the buyer sees a higher price than you set – this is worth taking into account in pricing;
• this procedure applies to files delivered by automatic download;
• taxes on your own income are your responsibility. Etsy's rules state that the platform, when required by law, reports seller data and transaction information to state authorities.

Regular selling on Etsy is an activity that has to be made official. Which form suits you is explained in the ACS.lt article “Self-employment: registration certificate or business certificate”.

Price and currency

Etsy recommends creating listings in the same currency as your payment account. If the account is in euros and you set prices in dollars, an additional 2.5% is deducted from every sale for currency conversion. Buyers still see prices in the currency they have chosen.

How to be found

• In the title and tags, write what the buyer searches for. If you are targeting foreign buyers, write the listings in English.
• In the first photo, show the product in use: a template on a phone or on a desk, not an empty file.
• State clearly that it is a digital item and that no physical object will be shipped – this way you will avoid disappointed buyers.
• Create sets and series: a buyer who has found the right style often buys several related files.

Frequently asked questions