Tax Collection and Offsite Ads

[ValeryAccessory]

Hello,

In our country, we remit a tax (referred to as tax 2) to the government based on the fees and advertisements charged by ETY for services such as fees or Ads, etc. The ads (including Ads and Offsite Ads) are treated as separate entities. The government collects tax on this amount quarterly (every 3 months). If ads are generated outside the country of your location, no tax is levied on them.

However, there is currently no option available on the ETSY panel to exclude our country specifically for Offsite Ads.

Is there any alternative method to block the ads specifically for our source country?

Warm Regards

[NanaLetha]

You can't do that. 

[ValeryAccessory]

Yes, it appears that, at the moment, there is no workaround for this limitation. The lack of control over disabling ads for specific regions in the ETSY panel is a constraint that you currently have to work within.

[CraftyCornishMaids]

Your post doesn't make sense,

Offsite Ads are generated by platforms like google, their servers are everywhere, someone in Turkey, may not be on a server in Turkey, they could be bounced off one in Poland, when they click on the google ad, and eventually get to your shop

You don't know what "country" generated the ad ... it's a very strange concept for a worldwide platform

I think you need to find out more about the rules, as they don't seem to fit the real world

[ValeryAccessory]

It seems there might be a misunderstanding. I'm unsure if you've ever set up campaigns in Google Ads; there's also the Google Merchant Center, but that's a different aspect.

This issue doesn't pertain to servers; rather, it concerns the audience of the ads, i.e., the customers. In campaigns, you typically have the ability to geographically target specific segments. For instance, in a country, you can choose specific locations to display the ads.

However, in this ETSY panel, that level of control is currently unavailable. The main point here is that you cannot disable ads for specific regions, such as a particular country.

Perhaps, over time, ETSY will provide more control over offsite ads.

[ArtDollsbyJD]

@ValeryAccessory   If you are under the $10.000 USD you can disable the ads.  It's under settings in the shop manager.

Etsy offsite ads are not run like Google ads or even Facebook ads.  All Etsy does is make the ads available to Google, etc.  Etsy is paying for the offsite ads.  We are not as sellers until an offsite ad is used.  Then we pay for that ad that brought in revenue.

So you are not paying for the offsite ads.  It is outside your control.  Etsy is paying.  This is not like Google ads. 

So no Etsy will not give this kind of control as they never have in 15+ years.  THe current offsite ads is just an itteration of what Etsy has always done.

My suggestion is to go back to your tas advisor and ask about ads over which you have no control over use or payment.  Your funds are not used.  You pay only when an ad is used.

However you can also opt out of the ads if you are under $10,000 USD . 

[ValeryAccessory]

Dear @ArtDollsbyJD , I have the option to disable it, but my preference is to activate and use it.

The fundamental issue lies with the software itself. Offsite Ads can be featured on various platforms such as Google, Facebook, Pinterest, and others. Typically, there will always be a conversion focus based on factors like likes and the number of items sold, rather than just brand recognition. It's feasible to implement controls for the location aspect of Offsite Ads.

What I find challenging is the resistance to exploring new possibilities. Some members tend to assert, "This is the way it is, just use it." However, why not consider improvements? In a world where everything is constantly evolving, perhaps there is room for change.

Consider the alternative – why does ETSY provide the option for alternative images? If that feature didn't exist, one could argue the same point.

The core issue lies in understanding the intricacies of the tax structure. Many accountants encounter challenges with applications like these, and it can be confusing even for professionals. Certain applications are relatively new, and navigating tax-related matters when purchasing services from overseas, especially if you don't provide a tax number for specific sites, can lead to double taxation.

In my case, I want to utilize Offsite Ads, but the inability to block ads in the original country results in an annual cost of around $1,000, for instance.

[CraftyCornishMaids]

@ValeryAccessory 

The deal that etsy has with search engines like google,

is that etsy gives them all the data, on all the items, in the shops that are opted in, and the search engines show whatever they think, that will generate clicks and sales.

none of it is etsy software

none of it is country specific

Your tax regime, is not living in the real world, it is many years behind reality

Google isn't going to go backwards, to match old fashioned tax regimes, 

[ValeryAccessory]

@CraftyCornishMaids This could indeed be related to outdated or immature tax principles; you may be right. However, there's a crucial aspect you might have overlooked: If you don't sell in France, will your offsite ads still be shown to computer/mobile users in France? This location control appears to be determined by your shipping profile.

That's the point; controlling is not outdated but a form of progress. ETSY could potentially offer us control over not only locations but also other variables. For instance, imagine the ability to create keywords for specific countries, especially if you are familiar with the language.

This transcends the limitations of relying solely on titles and tags. Optimizing SEO for both ETSY's internal search and the keywords you employ in your campaigns could not only drive conversions but also cultivate brand recognition within specific segments if desired. Consider the possibility of creating tailored ads for such segments. Additionally, for ads featuring images, ETSY might provide an option to use one of the gallery images, enhancing visual appeal.

In my country, I always created Google Ads campaigns and Facebook Ads before Meta. Using Merchant Center etc. was different, and Google provides various tools to its users based on the country, including payment systems.

Certain online services seamlessly integrate various social platforms, allowing users to publish images and videos across multiple channels at scheduled intervals. Similarly, for Offsite ads, ETSY has the potential to achieve comparable functionality. Meta is doing that by simply merging Facebook and Instagram if you want to publish for both, making your life easier.

Imagine if ETSY could generate ads from your listings based on your shipping profile for various locations you specify; such a feature would undoubtedly represent a noteworthy software enhancement. Integration plugins, like those between Google Merchant Center and WooCommerce, are pertinent to this discussion. When referring to software, I include these integrations. It's conceivable that the offsite panel might undergo changes over time, and I anticipate ETSY making such advancements in the long run. However, some may argue to simply use it without questioning.

[CraftyCornishMaids]

@ValeryAccessory 

Etsy is doing nothing with offsite ads, they don't generate a single thing,

They just pass all the info to the platforms, and let them decide who/what/where to advertise, and whatever keywords the platform thinks works

....

however don't forget, for offsite ads, you are not paying a fee for the google ad that was placed, you are paying etsy a commission fee on the sale, ... and etsy is not the advertiser

from a tax point of view, it could be very different

[ValeryAccessory]

Dear @CraftyCornishMaids, On the invoice, I would prefer that ETSY doesn't disclose detailed information, especially for offsite ads, whether it is required after a threshold amount. Instead, I suggest incorporating the charged value within a listing fee. This way, it would give the impression that ETSY is actively managing the ads, not me.

Such a change could potentially spark an interesting discussion of course. In Europe, buyers can opt out even after reaching the 10-grand threshold I guess. However, on the current invoice, there are two lines: Etsy Ads Fee and Offsite Fee, with their sum calculated separately. Personally, I would prefer the opposite approach, but this is worth discussion, and this additional tax seems inevitable. 

[CraftyCornishMaids]

@ValeryAccessory 

Etsy is not actively managing the ads, the platforms do

All etsy does, is dump all available info in the listing, to the platforms for them to actively manage

then just charges us a percentage of the sale, IF it ever results in one.

so it could be debatable with your tax authorities, if it is a marketing fee ... because it is only paid on a sale, as a percentage of the sale fee

you are not actually paying for the per-click ad - etsy does that

[BagmakerSupply]

@ValeryAccessory: "If ads are generated outside the country of your location, no tax is levied on them." I think that the tax is based on the buyer's location not where the ad was "generated". You need to speak with a qualified tax expert, but the some basic information is available at https://www.facebook.com/business/help/1020947424780313?id=287849115238870

[ValeryAccessory]

@BagmakerSupply  Regardless of the ad's location or generation, the tax will be levied. However, if the ad is not intended for consumers in my country, then as a buyer, I will be exempt from the additional quarterly tax. It's a peculiar situation, isn't it?

[Vintorious]

The only alternative is to create and use your own Website, which will give you 100 percent control over advertising. Having a shop on Etsy and exercising your preference to activate and use their offsite ads means you are agreeing to how Etsy generates those ads.

[StarfishCollectibles]

That's a bit misleading...no one, ultimately, is exercising any preference to activating the offsite advertising.  At a certain sales revenue level, Etsy exercises their preference to squeeze some more juice out of the lemon, and activates off-site ad charges for us anyway

[ValeryAccessory]

You are correct. Additionally, investing solely or, at the very least, predominantly in your website in the long run will enhance the value of your brand image.

[Vintorious]

@StarfishCollectibles OP has already said that they are choosing to stay in.

[StarfishCollectibles]

The basic concept of off-site ads is flawed, because it is a "one size fits all" approach.  We are a vintage items seller, and have been with Etsy since the middle of 2013.   We're making money, so that's all good.  But sometimes I have to shake my head.

An example from this past week.  We sold an item to a buyer, and when confirming her order, advised her that we had one more item, not yet listed of the same type (antique quilled doll furniture).  She was very enthused, and asked to have it.  So I created a custom listing for her, gave her a discount, and then waived the small up-tick in postage cost for the second item being packed with the first.

Imagine my surprise when I looked later that day at our payment account, and found that the second item was hit with an off-site ad charge.  However, item one was not.

How could there have been an off-site ad for something that was only listed that same day, and then sold within hours?  The additional charge for the off-site ad made the profit on the second item dwindle by almost 40%.

Talking to the "chat" person (not a bot) was hopeless.  All she did was read me something about how off-site ads work, and it was information that I already knew.  Totally not applicable to this case.  

It's annoying when I do the right thing, by adding the additional item to Etsy, rather than just selling it to the buyer "out the back door" so to speak.  And then lose money by working within the system.

[CraftyCornishMaids]

they probably googled it to get back to your store,

the offsite ad stats, left hand side, shows the item the ad was for

[BagmakerSupply]

@StarfishCollectibles: Presuming that everything is working the way it should, the buyer must have clicked on an ad for one of your items after their first purchase but before their second purchase. Your off site ads page will have details on what item and at what time they clicked on an off site ad.

[StarfishCollectibles]

The buyer is a previous purchaser, and thus did not have to Google anything.  I asked her directly, as she is a very friendly chatty type of customer.  So I think it's a glitch.  There is no record on the ads page of any clicks by her, but perhaps I am mis-informed:  does a click by someone OTHER THAN the buyer (i.e. a non-buyer) trigger the fee?  I wonder...

[ValeryAccessory]

Could it be that if a customer clicks on certain items before interacting with you, and then, after you open a new item, the buyer purchases it without any referral link? ETSY has already spent money to attract that customer, and ultimately, the goal is conversion. This is achieved irrespective of the specific item. This could possibly explain the issue here, though I'm not certain.

[BagmakerSupply]

@StarfishCollectibles: "... does a click by someone OTHER THAN the buyer (i.e. a non-buyer) trigger the fee?" The off site ad is determined by a cookie left on the computer so someone else could have triggered it.

"There is no record on the ads page of any clicks by her," If you were charged the off site ad fee, your Off Site Ads page https://www.etsy.com/your/shops/me/stats/offsite-ads will have the information on 'Advertised item', 'Date clicked', 'Item shopper bought', 'Date of sale', 'Sale value'.

[StarfishCollectibles]

I just checked the stats for the item vis a vis offsite ad fees...nothing whatsoever.  But I wonder if I triggered it myself, somehow.  When I want to send a customer a link, I always open a private page for that purpose (otherwise, it creates a link with a URL that would mean the customer would need a password to look at it (I think, anyway).