Firstly, Happy New Year to everyone!
I wanted to post an update, and let you know that I've decided to keep my Etsy shop open for the time being. I will continue to check the Etsy forums for news about the new VAT laws. If anything changes, I will have to decide how to proceed, but for now things will remain untouched.
The reason I have decided to keep things the way they are is because everything I have been reading clearly states that Etsy is responsible for collecting the VAT. Individual sellers are NOT responsible. If you would like to read more about it, click on the links below.
The first is a flow chart to determine who is affected by the new law. If you only sell your services through a third party platform or marketplace, then the rule changes don't apply to you.
The second is a guide for businesses supplying digital services. Scroll down to the very bottom and you will see a paragraph entitled "Digital portals, platforms, gateways and marketplaces." It reads:
"If you supply e-services to consumers through an internet portal,
gateway or marketplace, you need to determine whether you are making the
supply to the consumer or to the platform operator. If the platform
operator identifies you as the seller but sets the general terms and
conditions, or authorises payment, or handles delivery/download of the
digital service, the platform is considered to be supplying the
consumer. They are therefore responsible for accounting for the VAT
payment that is charged to the consumer."
The third is a Twitter Q&A about EU VAT changes. Scroll down and read the questions and answers in Section C: Sales via third-party platforms. Etsy is even named in Question C3.
Maybe this information will help if you are a seller of digital downloads and are unsure of how to proceed. I still hold out hope that some kind of resolution will be found in the near future.