Yes. Since January 1, 2024, Etsy has been legally required to report Canadian sellers’ identities and gross sales to the CRA every year. This is a federal reporting rule for digital platforms, and Etsy files under it each January. If your shop had a reasonable level of activity, the CRA already has your numbers.
What Etsy sends the CRA every January
Canada adopted reporting rules for digital platform operators starting with the 2024 calendar year. Under these rules, Etsy must file an annual information return with the CRA by January 31 covering the previous year. For each reportable seller, the return includes:
- Your name and address
- Your tax identification number: SIN for individuals, business number for corporations
- Your total sales for the year, broken down by quarter, along with the number of transactions
- The fees, commissions, and taxes Etsy withheld or charged, also by quarter
Etsy must also give you a copy of what it reported about you by the same January 31 deadline. If you have noticed a new tax summary document in your Etsy account in recent years, that is why it exists.
The small-seller exclusion, and why most shops do not qualify
The rules leave out casual sellers. Etsy does not have to report you if, during the year, it processed fewer than 30 sales for you and the total paid to you was $2,800 or less. Both conditions have to be true. A shop that sells 40 items at $15 each is reportable. So is a shop that sells five items at $700 each. In practice, anyone treating Etsy as a real side business gets reported.
The $500 penalty for holding back your SIN
Platforms have to collect your tax identification number to file these reports. If you refuse to give Etsy your SIN or business number, the CRA can charge you a penalty of $500 for each failure, and Etsy may restrict your shop until you provide it. There is no upside to stalling.
What this means for your tax return
The CRA matches platform reports against tax returns. If Etsy reports $18,000 in gross sales and your return shows no business income, that gap is easy for their systems to flag. The income was always taxable. What changed is that the CRA no longer depends on you to mention it.
Report your Etsy income as business income on your personal return, or on the corporate return if you have incorporated. You also get to deduct your costs: materials, Etsy fees, shipping supplies, and a portion of home workspace costs if you qualify. Sellers who come to us after a CRA letter usually owe less than they feared once expenses are properly claimed, but catching up is always more expensive than filing right the first time.
GST/HST is a separate question
Income reporting and sales tax are two different systems. Etsy has collected and remitted GST/HST on Canadian orders since July 1, 2022 under the marketplace rules, whether or not you are registered. Your own registration still matters once your worldwide taxable sales pass $30,000: it affects the tax charged on your Etsy fees, your ability to recover GST you pay on supplies, and any sales you make outside Etsy. Our Etsy GST/HST guide covers that side in detail.
Frequently asked questions
Does Etsy tell me what it reported?
Yes. Platforms must give each reportable seller a copy of the reported information by January 31. Look for a tax summary in your Etsy account covering the previous calendar year.
I only sold a few items. Is the income still taxable?
Yes. The 30-sale, $2,800 exclusion only decides whether Etsy files a report about you. It has nothing to do with whether the income is taxable. Business income is taxable from the first dollar.
Can the CRA see years before 2024?
The automatic reports started with the 2024 year. For earlier years the CRA can still request records from platforms and payment processors, and it has done so before. If you have unreported years, a voluntary disclosure can often reduce or eliminate penalties.
Does this apply to other platforms too?
Yes. The same rules cover eBay, Amazon Handmade, Uber, DoorDash, Airbnb, and most other digital platforms with Canadian sellers.
Related guides
- Etsy GST/HST for Canadian sellers
- Do you need to register for PST as an online seller?
- Does Amazon collect PST and QST in Canada?
- See how our e-commerce bookkeeping service works
Not sure what the CRA already knows about your shop?
We prepare returns for Etsy and marketplace sellers across Canada, including catching up on unfiled years before the CRA comes asking. Get in touch and we will tell you exactly where you stand.