This article is for general information only and is not accounting or tax advice. Always make decisions specific to your situation together with a certified accountant.
Almost everyone who starts selling on Etsy asks the same question: "I sell as a hobby; do I still need to set up a company?" The answer depends on whether your sales are regular and made for commercial profit.
When do you need a company?
Under Turkish tax legislation, two criteria are decisive:
- Regularity: Selling once or twice a year is treated differently from selling regularly every month.
- Profit motive: If you make and sell products to earn a profit, it counts as commercial activity.
If you sell products on Etsy regularly, the most common route in practice is to set up a sole proprietorship. It's quick to establish, costs less than a limited company and lets you run your e-export activity on a legal footing.
What changes once 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 establish business relationships with payment providers and banks.
- Your regular tax filing and bookkeeping obligations begin.
Selling abroad: how does e-export work?
Most of your Etsy buyers are abroad. That puts your sales within the scope of exports. In the print on demand model, when the product is printed by a production partner abroad and shipped directly to the buyer, the process works differently from classic exporting; clarify with your accountant how to handle the documentation and filing side.
What can you deduct as expenses?
When you have a company, you can deduct your business-related expenses. Typical items for Etsy sellers:
- Etsy listing, transaction and advertising fees
- Print on demand production and shipping costs
- Design and automation software subscriptions
- Image/stock design licenses
- Internet, computer and related hardware (partially)
That's why it's important to keep all payment records and invoices organized.
Common mistakes
- Assuming "it's abroad, so nobody will see it." Payment transactions are recorded in the banking system.
- Keeping scattered records. Download and archive your Etsy reports every month.
- Setting up a company and then neglecting the bookkeeping. Late filings turn into penalties.
- Leaving taxes out of your profit calculation. Factor in the tax burden when setting your prices.
Frequently asked questions
Is selling on Etsy legal?
Yes. Selling on Etsy from Turkey is legal. What matters is declaring your earnings in accordance with the legislation.
I sold a few products as a hobby. What should I do?
Occasional (non-recurring) sales are treated differently. However, once sales become regular, it becomes commercial activity. Ask your accountant where the line is.
Should I start selling before or after setting up a company?
The common approach is to test the model on a small scale and set up a company once you see sales becoming regular. Making this decision without delay saves you the burden of retroactive corrections later.
Next step
Once the legal side is clear, you can focus on growing the business. Our print on demand strategy on Etsy article explains a plan for regular listing and deepening your niche. If you want to automate product creation, take a look at how Printmeet works.