Dropshipping adds import VAT complexity most standard guides skip. Here’s how the R1 million threshold and import rules interact.
Last updated: June 2026
Dropshipping doesn’t get a special VAT threshold — the R1 million compulsory threshold (or R50,000 voluntary threshold) applies the same as any other retail business, based on the price your customer pays you, not your profit margin.
If your supplier ships from within South Africa, normal VAT rules apply. If your supplier ships directly from outside South Africa to your customer, that’s an import, and import VAT is generally payable at customs clearance, calculated on the customs value of the goods plus applicable duties — this is separate from any domestic VAT you charge your end customer, and getting both right requires careful tracking of your supply chain.
The sale price — the full amount your customer pays. Your margin is irrelevant to VAT turnover calculations, which are based on the value of supply, not profit.
Generally the importer of record, which depends on your supply chain arrangement with your overseas supplier — this should be clear before you start selling a product.
Generally no, if you’re simply purchasing from a foreign supplier and reselling — you’re their customer, not conducting a taxable activity in their jurisdiction.
Generally yes, once VAT-registered, subject to normal input VAT rules and proper import documentation supporting the claim.
Generally no — this typically remains your responsibility as the seller or importer, unless your specific platform has a distinct arrangement in place.
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