How to Handle Customs Fees and VAT for International Etsy Orders

Getting customs fees and VAT right on international Etsy orders starts with knowing what gets charged at checkout versus what the carrier collects at the border. In most shipments, import duties, taxes, and brokerage or handling fees can be billed to the buyer on delivery (DDU/DAP) or prepaid by you (DDP) so the package clears without a surprise bill. The practical work is in the details: accurate item descriptions, correct declared value and country of origin, and, when relevant, the marketplace VAT or IOSS info passed electronically to your shipping service. A quick, plain-language note in your listing and messages about who pays what prevents the most common problem: customers assuming tax paid means no fees at the door.

Who pays customs duties on Etsy international deliveries?

Delivered Duty Unpaid (DDU) vs Delivered Duty Paid (DDP)

On Etsy, import duties, tariffs, and customs clearance fees are usually paid by the buyer, not the seller. That is the common setup for international shipping, especially when you ship with postal services.

This is often described as:

• DDU (Delivered Duty Unpaid), also called DAP (Delivered At Place): The buyer pays import charges to the carrier or customs authority when the package arrives in their country.
• DDP (Delivered Duty Paid): You, the seller, pay those import charges upfront as part of shipping. The buyer should not be asked for extra customs payment at delivery.

DDP can reduce delivery friction, but it is not available for every route or carrier. If you want to offer it, you typically need a carrier and service level that supports DDP and correctly transmits the required customs data.

Where buyers see duties and fees during delivery

With DDU/DAP, buyers usually discover fees in one of these moments:

At checkout, Etsy may show a notice that additional duties and fees may apply, especially when the seller and buyer are in different countries.

After shipment, the carrier may contact the buyer (email, text, letter, or tracking update) with a payment request before delivery or before the parcel is released from customs. This bill can include duties or tariffs, import VAT or other taxes (depending on the destination), and carrier handling or brokerage fees.

Etsy explains this buyer responsibility clearly in its help guidance on customs charges: Will I Have to Pay for Tax or Customs on My Order?

Avoiding surprise fees with clear expectations

The simplest way to prevent unhappy messages and refused deliveries is to set expectations early and repeat them briefly:

In your listing and shop policies, add a plain line like: “Buyers are responsible for any customs duties, import taxes, and carrier handling fees unless DDP is selected.”

In your order confirmation message for international buyers, restate whether you ship DDU/DAP or DDP. If you cannot offer DDP, say so directly. Clarity beats long explanations, and it protects your reviews.

VAT on Etsy orders and when Etsy collects it

EU and UK VAT basics for marketplace sales

VAT is a consumption tax charged in many countries, and it works differently from customs duties. The key Etsy takeaway is that Etsy may collect VAT at checkout in some cases, but that does not automatically mean there will be zero charges at delivery.

For EU deliveries from outside the EU, Etsy generally collects VAT at checkout when the order is a physical item and the total package value (excluding delivery) is €150 or less. If the value is over that threshold, import VAT and any customs duties are typically collected at the border instead.

For UK deliveries from outside the UK, Etsy collects and remits UK VAT at checkout when the package value (excluding delivery) is £135 or less. Above £135, VAT is usually charged at import. Etsy’s criteria and thresholds are explained in its guidance on custom fees and physical VAT collection.

IOSS, VAT numbers, and what to put on labels

If Etsy collected EU VAT for an eligible order, the shipment needs the right electronic tax data so the buyer is not charged VAT twice.

In practice, that means:

• Etsy’s IOSS number must be electronically transmitted by the shipping service for EU-bound shipments that qualify (typically €150 or less).
• If you buy an Etsy shipping label, Etsy transmits this data automatically for eligible orders.
• If you buy postage elsewhere, you need to ensure your carrier supports electronic transmission and uses the tax ID provided in the order details.

A common mistake is writing the IOSS number on the box. Etsy’s guidance is to not write it on the package.

US sales tax vs VAT and customs duties

In the United States, most sellers deal with sales tax, not VAT. Etsy may automatically calculate, collect, and remit state sales tax for orders shipped to states that require marketplace collection.

That US sales tax is separate from import duties and import taxes charged by other countries. So an international buyer can still owe customs duties or import VAT at delivery, even when the Etsy checkout looks “tax handled,” depending on the destination’s rules and the shipment value.

Shipping label and carrier choices that affect duties

Etsy labels vs third-party postage tools

Your shipping label workflow can change how smoothly customs goes, especially for VAT-collected orders. When you buy an international label on Etsy, Etsy pre-fills key customs fields from your listings (description, quantity, value) and you confirm or correct them before purchase. Etsy also combines the shipping label and customs form when the service supports it, which reduces mismatched paperwork.

Third-party postage tools can work just as well, but you have to be more disciplined about data entry. If Etsy collected VAT (for example, an EU order under the threshold), your carrier needs the tax info sent electronically in the way that carrier expects. If the tax data does not travel with the shipment, the buyer may get charged again at delivery and you are stuck untangling it.

If you want the details Etsy expects on international labels, their guide to managing international shipments is the best quick checklist.

DDP shipping services and when they work best

DDP (Delivered Duty Paid) tends to work best when you sell higher-priced items, ship to countries with frequent delivery fees, or you want a more “all-in” checkout experience. It can lower refusals and “why am I being charged?” messages.

The tradeoff is cost and complexity. DDP services are often more expensive, and they require accurate product value and description so duties are calculated correctly. If you cannot reliably support DDP for a lane, it is usually safer to ship DDU/DAP and set expectations clearly.

Common carrier handoff issues at the border

Many international shipments involve a handoff between carriers (postal to local post, or a consolidator to a destination carrier). That handoff is where problems show up:

Tracking can stall while the parcel sits in customs intake or waits for the next scan event.

Customs may hold the package if the description is too generic, the declared value looks inconsistent, or the recipient name and address formatting causes validation issues.

Buyers may miss a carrier payment request, which can delay delivery or trigger a return.

If you are seeing repeat issues for a specific country, switching service levels or carriers often fixes it faster than rewriting your listings.

Customs forms done right: value, description, and origin

Declared value and what to include in the parcel

Customs forms are not just a shipping formality. They are what border agencies use to decide whether tax is due, whether duties apply, and whether your parcel needs inspection. The best way to avoid delays is to declare the real transaction value and make it easy for a human to understand what you sold.

A clean declared value usually includes the price the buyer paid for the item. Depending on the carrier and destination, shipping and insurance may be treated separately or factored into how taxes are assessed, but you should never “adjust” values to try to lower fees.

Inside the parcel, include a simple packing slip or receipt with:

• Item name and quantity
• Price paid
• Order number
• Buyer name and shipping address

This helps when a package is opened for inspection and reduces back-and-forth if the carrier asks the buyer for proof of value.

Country of origin and materials for handmade goods

“Country of origin” is where the product was made, not where it ships from. For handmade goods, this is usually straightforward: if you made the item in the US, the origin is US.

Materials matter because some product categories are regulated and some duties depend on composition. Keep descriptions specific, especially for:

Textiles and apparel (cotton, wool, polyester blends)

Jewelry (silver, gold-plated, stainless steel)

Leather goods (genuine leather vs faux leather)

Wood products (unfinished wood, plant materials)

You do not need to write a novel on the form. One strong line beats three vague ones. “Handmade sterling silver ring” clears more easily than “accessory” or “gift.”

Gifts, samples, and discounts on customs declarations

Marking a commercial Etsy order as a “gift” is a common mistake. Even if the buyer is sending it to someone else, it is still a retail sale. Mislabeling it can lead to delays, reassessment of charges, or penalties.

For discounts, declare what the buyer actually paid. If you ran a sale, use the discounted price as the transaction value and keep documentation in case the buyer is asked to prove it. For true samples (rare for Etsy, but possible for wholesale-style outreach), use a realistic value and label it clearly as a sample only if it genuinely is not sold merchandise.

HS codes and tariff numbers for smoother customs clearance

Finding the right HS code for your product

HS codes (Harmonized System codes) are standardized product classification numbers used worldwide. They help customs decide what rules apply, which can speed up clearance and reduce “held for information” delays.

For most Etsy sellers, the goal is not perfection on day one. It is consistent, reasonable classification that matches what you actually ship. Start with a clear product description, then narrow it down by:

• What the item is (ring, candle, scarf, mug)
• What it is made of (sterling silver, soy wax, cotton, ceramic)
• How it is used (clothing vs home decor vs jewelry)

A practical tip: build your HS code from your best-selling listings first. Save the code in your shipping workflow or product notes so you are not reinventing it every order. If you ship from the US, the USITC HTS search tool is a solid starting point for finding the closest classification language.

Using HS codes for US to EU shipments

When shipping from the US to the EU, you will often see multiple code lengths:

• HS (6 digits): the global baseline
• EU CN (8 digits) and TARIC (often 10 digits): the EU’s more detailed versions used to apply EU measures

Even if your label only asks for an HS code, having the correct family of codes can help you estimate landed costs and avoid vague descriptions. For EU-facing checks, the European Commission’s Access2Markets portal is the most reliable place to look up EU tariff details by product code.

When a carrier can help assign codes

Carriers and postage platforms sometimes suggest HS codes, especially for common items. That can be helpful as a starting point, but do not treat it as guaranteed accurate for handmade or unusual products.

If you are unsure, give the carrier a more specific description (materials, use, and manufacturing). For higher-value items or frequent international shipping, it can be worth getting a formal classification opinion from a customs broker so you are not guessing.

VAT invoices and records Etsy sellers should keep

Downloading order receipts and tax breakdowns

For international Etsy orders, good records are your safety net when a buyer claims they were “charged twice,” or a carrier asks for proof of value.

At minimum, keep copies (PDF or saved screenshots) of:

• The Order Details page showing item price, shipping, and any taxes collected at checkout.
• The buyer’s receipt or confirmation details that show when VAT was collected by Etsy (for VAT-eligible orders, Etsy notes the relevant tax number in the order information). (help.etsy.com)
• Your shipping label and customs form data (declared value, description, and origin).

Also remember: Etsy’s emailed receipt is helpful, but it is not automatically a legally compliant VAT invoice in every situation. (etsy.com)

Providing invoices to EU or UK buyers when requested

Some EU or UK buyers (especially business customers) will ask for a VAT invoice for their records. If you’re required to provide one, create a simple invoice that matches the Etsy order and includes your seller details, the buyer’s details, the invoice date, item description, and totals.

If Etsy collected VAT at checkout, make sure your invoice does not “recharge” VAT. Instead, reflect the tax as collected via the marketplace where appropriate. When in doubt, keep the invoice factual (what was paid, and what was collected at checkout) and avoid making tax claims you cannot support.

Handling VAT refunds, returns, and canceled orders

When an order is canceled or refunded, process it through Etsy Shop Manager so the financial records stay consistent and Etsy applies the platform’s normal refund mechanics. (help.etsy.com)

Two common VAT-related scenarios to plan for:

If VAT was collected at checkout (marketplace-collected VAT): refund through Etsy so the buyer’s refund aligns with what they paid.

If the buyer paid import VAT or duties on delivery: those border charges are typically between the buyer and their customs authority or carrier. You can help by providing the order total and proof of value, but you usually cannot refund import taxes from your Etsy payment unless you are explicitly agreeing to cover them as part of customer service.

Delivery problems: refused fees, held packages, and returns

What to do if a buyer refuses customs charges

If a buyer refuses customs charges (duties, import VAT, or carrier handling fees), the carrier usually treats it as a refused delivery. The parcel may be held for a short period, then returned to you or abandoned, depending on the destination and service level.

Handle it in this order:

1. Confirm what fee was requested and why. Ask the buyer for a screenshot of the carrier notice or tracking page. This helps you tell the difference between legitimate import charges and a misunderstanding.
2. Check the order for VAT collection. If Etsy collected VAT at checkout for an eligible order, the buyer should not be billed VAT again. You will often need the buyer’s proof of payment request to escalate with the carrier.
3. Set expectations on outcomes. If they still refuse the fee, be clear that delivery will likely fail and the item may return, sometimes with return postage due.

Etsy’s buyer-facing explanation that customs charges can be due on delivery is worth linking in your message so it does not feel like “your rule”: Will I Have to Pay for Tax or Customs on My Order?

Contacting the carrier and filing a claim

When a package is held, tracking will often show a customs status like “awaiting payment,” “clearance delay,” or “held at customs.” At that point, contact the carrier with:

• Tracking number
• Shipment date and service
• Declared contents and value
• Any VAT or tax reference shown in the order details (if applicable)
• Screenshots from the buyer of the payment request or hold notice

If the package becomes lost or damaged, follow the carrier’s claim process. Keep in mind that claims often require proof of value, so your Etsy order receipt and label purchase receipt matter. If you used Etsy shipping labels, keep the label record from your orders page so you can reference the transaction quickly.

Preventing repeats with listing and message updates

Most repeat delivery problems come from the same few causes: vague customs descriptions, missing tax data, or buyers not realizing fees may be due.

Three small updates usually reduce issues fast:

• Add one clear customs sentence in every international listing: buyers are responsible for import duties and fees unless you offer DDP.
• Use specific product titles on customs forms (materials + product type), not “gift,” “merchandise,” or “accessory.”
• Create a short saved reply for international orders that explains DDU/DAP versus DDP in plain language and tells buyers to watch tracking for any customs payment request.

Over time, you can also track which countries generate the most holds or refusals and adjust shipping services for those destinations before it becomes a pattern.