Selling on Amazon and Takealot has become one of the fastest-growing ways for South Africans to enter the e-commerce market. These platforms provide small and medium-sized businesses with access to thousands of customers, automated fulfilment options, and a steady stream of online demand. But with every sale comes a responsibility most sellers underestimate: SARS compliance.
Whether you operate casually as a sole proprietor, run a registered company, or sell part-time while working a job, SARS views any profit-seeking online activity as "trade", which means your income is taxable. The goal of this guide is to help Amazon and Takealot sellers understand their tax, VAT, and accounting obligations, while giving you the clarity you need to run your business confidently and avoid penalties.
When Does SARS Consider You a Business?
A common misconception among new online sellers is that if your business is small, informal, or “just a side hustle,” you don’t need to worry about taxes. SARS disagrees.
According to the South African Income Tax Act, any person who earns income from trade, including online sales, is required to declare that income — regardless of the business size. If you import products, list items, fulfil orders, and earn revenue, SARS considers your activities taxable business operations.
This applies whether you are:
- A sole proprietor: According to the South African Revenue Service (SARS), a sole proprietorship is a business that is owned and operated by a single individual, and it is not a separate legal entity from its owner.
- A partnership: A partnership, as defined by the South African Revenue Service (SARS) and South African common law, is the relationship existing between two or more persons who join together to carry out a trade, a business, or a profession with the common goal of making a profit.
- A micro-business: A natural person (sole proprietors and partners in a partnership) or a company (including a close corporation and a co-operative) may qualify as a micro business if the qualifying turnover for the year of assessment does not exceed R1 million. The qualifying turnover includes the total receipts from carrying on business activities, excluding any amount of a capital nature and amounts exempt from normal tax. Learn more about this on SARS.
- A registered company (Pty Ltd): A SARS registered company is a formal business entity that has completed the mandatory registration process with the Companies and Intellectual Property Commission (CIPC) and subsequently been registered with the South African Revenue Service (SARS) for income tax purposes.
Once you sell with the intention of making a profit, your tax obligations activate.
Tax Obligations for Takealot and Amazon Sellers
Income Tax Registration
This is mandatory for every seller. Your Amazon and Takealot sales must be included in your annual return (IT12 or IT14). You must declare:
- Gross sales before fees
- Expense deductions
- Imported goods
- Takealot and Amazon commission fees
- Foreign earnings from Amazon Global Selling
Failing to declare marketplace income may result in penalties, interest, or audits.
VAT Registration
VAT registration becomes compulsory when your total turnover exceeds R1 million in any 12 months.
Voluntary registration is allowed from R50,000 turnover.
If you are VAT-registered:
- Charge VAT on Takealot sales
- Claim VAT on expenses (shipping, duties, marketplace fees, packaging, etc.)
- Submit VAT201 returns every two months
Importer/Exporter Registration
If you import products to resell, SARS requires you to register as an Importer. You’ll need to pay customs duties, import VAT, and keep all commercial invoices.
For Amazon Global Selling, you may also need export documentation.
How to Record Amazon & Takealot Income Correctly
One of the biggest mistakes e-commerce sellers make is declaring only what appears in their bank account.
SARS requires you to declare gross revenue, not the amount after fees.
For every statement period:
- Record gross sales revenue
- Record marketplace fees (referral, fulfilment, storage, advertising)
- Convert foreign payouts using SARS official exchange rates
- Reconcile sales, fees, and payouts monthly
This ensures accurate profit, VAT, and tax calculations.
Accounting for Amazon and Takealot sellers
Amazon and Takealot deduct fees before paying you. These fees are legitimate business expenses and reduce your taxable income.
Typical fees include:
- Takealot commission
- Amazon referral fee
- Storage (FBA or Takealot FBD)
- Fulfilment/handling fees
- Advertising and Sponsored Product fees
- Stock handling and return fees
Correctly categorising these expenses helps optimise tax deductions and ensures compliance during SARS audits or verifications.
Inventory & COGS (Cost of Goods Sold)
Inventory accounting is critical for e-commerce sellers because it directly impacts your taxable income. SARS expects accurate tracking of:
- Opening stock
- Product purchases
- Import duties & shipping
- Landing costs
- Closing stock
COGS = Opening Stock + Purchases – Closing Stock
Misstating stock levels is one of the quickest ways to trigger a SARS verification.
SARS e-commerce tax rules
If you are VAT-registered:
- Charge VAT on South African sales
- Issue valid tax invoices
- Claim input VAT on expenses
- Zero-rate qualifying exports (Amazon international orders)
- Submit VAT201 returns on time
Takealot does not deduct VAT on your behalf — you must calculate and declare it yourself.
Amazon operates differently depending on which country you sell into, so understanding each marketplace's tax handling is essential.
Foreign Income for Amazon Global Selling
Many South African sellers use Amazon Global Selling to reach customers in the US, UK, and EU. Foreign income must be declared to SARS, even if you keep funds in a Payoneer or Wise account.
You must:
- Convert earnings using SARS’ official monthly exchange rates
- Declare the income on your tax return
- Understand whether the sale qualifies as a foreign export
- Consider any Double Taxation Agreements (DTAs)
Ignoring foreign income is a common trigger for SARS audits.
Recordkeeping Requirements (5 Years Minimum)
SARS requires e-commerce sellers to keep records for five years, including:
- Supplier invoices
- Shipping & customs documents
- Amazon / Takealot payout reports
- VAT invoices
- Bank statements
- Inventory records
- Foreign currency conversions
Digital records are acceptable as long as they are organised and accessible.
Best Accounting Software for Online Sellers
The top systems for managing e-commerce finances are:
- Odoo Accounting – Excellent inventory features, ideal for product-based sellers
- Xero
- QuickBooks
- Sage Cloud
These tools automate bank feeds, reconcile Amazon/Takealot payouts, manage stock, and track VAT.
As an official Odoo Accounting Partner and Odoo Partner, we customise and build the most suitable solution to meet your needs as a seller.
Common Mistakes Made by Online Sellers
- Mixing personal and business transactions
- Declaring only bank deposits instead of gross sales
- Incorrect VAT handling
- Not tracking COGS
- Not declaring foreign income
- Poor reconciliation of marketplace statements
Avoiding these mistakes reduces your risk of SARS penalties and helps you run a more profitable business.
We'd love to help you on your journey! Get in touch with our team of Accountants and Tax experts to help keep you compliant. As an official Odoo Accounting Partner, our Accounting Software Solutions are perfect for South African online sellers.
FAQs
Q: Do I need a company to sell on Takealot or Amazon?
No, you can operate as a sole proprietor, but you must still declare all income.
Q: Are marketplace fees deductible for tax?
Yes, commissions and fulfilment fees are valid business expenses.
Q: Does Amazon deduct VAT?
No. You are responsible for VAT compliance.
Q: Do I pay tax on Amazon Global Selling income?
Yes. Foreign income is taxable in South Africa.
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info@xra.co.za
Phone
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Office
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