Business World

Tuesday 27 September 2016

Etsy becomes a bit more secretive about finances

Alex Barinka and Jesse Drucker

Published 15/08/2015 | 02:30

The headquarters in Brooklyn of the online marketplace for internet users, handmade crafts and clothes
The headquarters in Brooklyn of the online marketplace for internet users, handmade crafts and clothes

Etsy, the online market place for handcrafted goods has implemented a new strategy that shrouds its offshore tax-cutting arrangements in secrecy.

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A change in the status of its Irish subsidiary to unlimited liability status means Etsy no longer needs to publicly disclose basic financial information about the unit.

The change means Etsy doesn't have to report publicly how much money is being moved through Ireland or the amount of tax its Irish unit will pay. Last month, US-based Etsy told users that anyone outside of the Americas will enter a terms of use agreement with Etsy Ireland, instead of the parent company.

The changes may help lower tax bills, Etsy says.

Etsy's Irish subsidiary's unlimited liability status means it doesn't have to publicly file financial data like balance sheets and income statements any more.

"As we continue to grow and expand our international business, we are generating an increasing amount of revenue and intellectual property outside of the US," Etsy said in a statement.

"After careful consideration and consultation, we have evolved our tax structure to accurately account for the value of that property. We pay taxes at the local rate and make all required filings in the jurisdictions in which we operate."

Etsy isn't a typical company. The company's initial public offering was among the first for a "certified B Corporation," meaning it passed tests showing it benefits the community, environment, employees, consumers and suppliers.

It has said transparency is one of its central values.

"As a public company, we will be able to provide a higher level of transparency and accountability to a broader number of people," chief executive officer Chad Dickerson said in a letter to prospective investors before its IPO. (Bloomberg)

Irish Independent

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