Vinted, Depop & “Side Hustles”: Understanding the €5,000 Tax Exemption in Ireland

If you sell on platforms like Vinted, Depop, or Instagram, and your income from these sources is less than €5,000 in a tax year, you may not need to register for self-assessment. Instead, you can declare this income through a Form 12 via PAYE services on Revenue’s MyAccount. However, there are a few important pitfalls to avoid.

Exceptions to the €5,000 Threshold

You will still need to register for self-assessment and file a Form 11 if any of the following apply:

Your total non-PAYE taxable income exceeds €5,000 in a tax year.
Your gross non-PAYE income exceeds €30,000 in a tax year.
Your taxable profits are reduced to nil (Nil profits can’t be taxed through PAYE & losses cannot be offset through PAYE)
You are already registered for self-assessment for some other reason.
Your spouse is registered for self-assessment and you are jointly assessed.
You are a proprietary director (i.e. you own more than 15% of the company), regardless of other income levels
You are a non-resident landlord, regardless of the amount of rental income
You are self-employed or your main source of income is foreign income, investment income, or other taxable sources that otherwise require self-assessment.

Are You Trading? Then You’re Usually Self-Assessed — But Not Always Filing a Form 11

The ‘Badges of Trade’

There’s no single legal definition of what constitutes ‘trading’ under Irish tax law, but Revenue and the courts use a framework known as the ‘badges of trade’ to assess whether an activity is a trade. These include:

Profit motive – Are you aiming to make a profit?
Frequency and repetition – Are you selling regularly or just occasionally?
Modification or improvement – Are you enhancing items to increase their resale value?
Organisation – Are you keeping records, managing stock, or operating like a business?
Time between buying and selling – Are items being sold quickly after acquisition?
Method of acquisition – Were items purchased with the intent to resell?
Financing – Is the activity funded in a way that suggests a business operation? i.e you’ve taken out short term finance to buy stock. This, in my experience, is a big one.

You don’t need to tick every badge. Revenue looks at the overall picture.

The full Revenue manual is here if you want to have a read: Part 02-02-06 What Constitutes a Trade

So, you’re trading. Now What?

If you’re trading then you’re within the self assessment net but that still doesn’t always mean filing a full Form 11.

You generally do not have to file a Form 11 if:

Your gross income is under €30,000, and
Your taxable profits are under €5,000 but above NIL, and
Revenue can reliably code the tax due into your PAYE tax credits

However, in practice:

It might be very difficult to code profits into PAYE credits in real time. Profits usually aren’t known until after year-end or near enough the year end.
Revenue is unlikely to allow coding against PAYE credits unless your activity is very low-level and predictable.

So, in most real-world cases, if you’re trading with a view to profits then you’ll need to register for self-assessment and file a Form 11.

Summary

The €5,000 exemption applies only to non-PAYE income under €5,000 if you’re not otherwise required to register for self-assessment
If your gross trading income exceeds €30,000, or your net profit exceeds €5,000, you’re considered a chargeable person and must file a Form 11.
An individual is a chargeable person and must file a Form 11 of there are “nil profits” as these cannot be taxed through the PAYE system.
Some individuals must file a Form 11 regardless of income, such as proprietary directors, non-resident landlords, or those already in the self-assessment system

Always keep clear records, and seek professional advice if you’re unsure especially as online platforms are now reporting your activity under DAC7 (EU rules requiring online platforms to report sellers’ income to tax authorities) – more to come on that!

Final Thoughts

If you’re unsure where you stand or just want peace of mind then it’s always worth getting professional help. I work with individuals and small businesses to make tax simple, clear, and manageable.

Feel free to get in touch whether you need one-off advice or ongoing support.

-Lisa

Lisa Lokasto