Short answer: You do not need a company to open a shop on Etsy; Etsy lets you register as an individual seller. In Turkey, however, what matters for tax purposes is the nature of your sales: if your sales are continuous and made with the intent to earn a profit, they generate commercial income, and the most common route is to open a sole proprietorship (şahıs şirketi) and become a registered taxpayer. If you are under 29 when you first become a taxpayer, you can benefit from the young entrepreneur exemption (genç girişimci istisnası) (income of up to 400.000 TL for 2026).
This article is for general information only and is not financial advisory service. Always make decisions specific to your situation together with a certified financial advisor (mali müşavir).
Does Etsy require a company?
No. To receive payments on Etsy, during Etsy Payments registration you give one of two answers to the question "what type of seller are you for tax purposes?":
- Individual or sole proprietorship: Choose this option if you do not have a registered legal entity. You are asked for your first name, last name, date of birth and home address; in some countries a tax number is also requested.
- Company (Incorporated business): If you sell on behalf of a company, Etsy verifies company details such as the company name, legal address and registration number in addition to your identity.
Etsy asks this question only to verify the payment account. Your tax obligations in Turkey are determined not by Etsy but by Turkish tax legislation. So "Etsy does not require a company" does not mean "I have no tax obligation".
When do you need a company?
Under Turkish tax legislation, there are two decisive criteria:
- Continuity: Selling once or twice a year is assessed differently from selling regularly every month.
- Profit intent: If you produce and sell products to make a profit, it is a commercial activity.
If you sell products on Etsy regularly, the most common route in practice is to set up a sole proprietorship. It is simpler to establish than a limited company and lets you run your sales on a legal basis. Decide with your financial advisor which company type suits you based on your expected turnover.
Does the tradesman exemption apply to Etsy sellers?
Article 9, paragraph 1, subparagraph 6 of the Income Tax Law (Gelir Vergisi Kanunu, GVK) brings the sale of certain home-made products under the tradesman exemption (esnaf muaflığı). According to the Revenue Administration (Gelir İdaresi), the conditions are:
- The products are made in the home where you live, by your own handwork
- The product is among those listed in the law: such as towels, covers, socks, carpets, kilims, knitwear, lace, embroidery, tourist items, baskets, beadwork, tarhana, erişte and mantı
- Apart from household tools such as sewing and embroidery machines, no industrial-type machines or machines capable of mass production are used
- No outside workers are employed and no workplace is opened
For sales made over the internet, the total annual sales amount must not exceed the annual gross amount of the minimum wage in effect that year. For 2026, this limit is 396.360 TL. If the limit is exceeded, the exemption is lost and income tax liability begins from the start of the following year.
Important note for print on demand sellers: POD products are not made by your own handwork in your home; they are produced with printing machines at the production partner's facility, and neither t-shirt printing nor digital products are on the list in the law. So if you sell POD or digital products, do not rely on the tradesman exemption; ask your financial advisor about your situation. The exemption is more relevant for those who sell products they make with their own hands, such as hand knitting, embroidery and jewelry.
Young entrepreneur exemption: a tax advantage for those under 29
For young people considering setting up a sole proprietorship, the most important incentive is the young entrepreneur income exemption in the Income Tax Law. According to the Revenue Administration's 2026 information:
- Who benefits: Fully liable individuals for whom income tax liability is opened for the first time due to commercial, agricultural or professional activity and who have not reached the age of 29 on the start date of the liability.
- Duration: Three tax periods starting from the calendar year in which the activity begins.
- Amount: The portion of income up to the amount of the second bracket of the income tax tariff is exempt from tax. For 2026, this amount is 400.000 TL.
- Conditions: Reporting the start of business within the legal period, running the business personally, and not later becoming a partner in an existing business.
- Note: An annual income tax return is filed even if there is no income; the unused exemption amount does not carry over to the next year. A person who stops the activity and starts again loses the "first-time liability" condition.
In previous years, a one-year social security premium support was also provided along with this incentive. According to the Revenue Administration, this premium support was abolished as of 1 January 2026; the tax exemption continues.
What changes when you set up a sole proprietorship?
- You can issue invoices for your sales.
- You can record your expenses (production, shipping, software subscriptions, advertising).
- It becomes easier to build a business relationship with payment providers and banks.
- Your regular tax return and bookkeeping obligations begin.
How are sales abroad assessed?
Most of your buyers on Etsy are abroad. When you ship the product from Turkey yourself, the sale is treated as an export. In the print on demand model, however, the product is printed by the production partner abroad and shipped directly to the buyer; because the product never leaves Turkey, documentation and declaration proceed differently from a classic export. Be sure to explain this distinction to your financial advisor when setting up your company.
We explained how the money accumulated on Etsy is transferred to your account in Turkey in the article Withdrawing money from Etsy to Turkey.
What can you deduct as expenses?
When you have a company, you can show your business-related spending as expenses. Typical items for Etsy sellers:
- Etsy listing, transaction and advertising fees (details: Etsy fees and profit calculation)
- Print on demand production and shipping costs
- Design and automation software subscriptions
- Image and design licenses
- Internet, computer and related hardware (partially)
That is why it is important to keep all payment records and invoices in order.
Common mistakes
- Assuming "it is abroad anyway, nobody will see it". Payment transactions are recorded in the banking system.
- Thinking the tradesman exemption applies to every product. The exemption only covers products made by handwork at home and listed in the law.
- Missing the young entrepreneur conditions. Not reporting the start of business within the legal period, or opening and closing a short-lived tax liability, can cost you the exemption.
- Keeping records scattered. Download and archive your Etsy reports monthly.
- Not including tax in your profit calculation. Factor in the tax burden when setting your prices.
Frequently asked questions
Do you need a company to sell on Etsy?
You do not need one to open a shop on Etsy; you can register as an individual seller. However, once your sales become regular, commercial income arises in Turkey and you need to become a registered taxpayer. In practice, the most common route is a sole proprietorship.
Does Etsy ask for a tax certificate?
When you register as an individual seller, Etsy verifies your identity and address details and does not ask for company documents. If you register as a company, your company details are also verified. The tax certificate (vergi levhası) is a matter of your tax obligations in Turkey, not of Etsy.
I sold a few products as a hobby, what should I do?
Occasional sales, that is, sales without continuity, are assessed differently. However, once sales become regular, a commercial activity arises. Ask your financial advisor where the line is.
Who can benefit from the young entrepreneur exemption?
Individuals for whom income tax liability is opened for the first time and who have not reached the age of 29 on the start date pay no income tax for three tax periods on the portion of their income up to 400.000 TL for 2026. Tax returns must still be filed.
Next step
Once the legal side is clear, you can focus on growing the business. The article Print on demand strategy on Etsy describes a plan for regular listing and niche deepening. If you want to automate product creation, take a look at how Printmeet works.