How to Calculate the True Cost of Importing Goods
Landed cost is the total cost of getting goods from their origin to your door in South Africa. It is not just the purchase price — it includes every expense between the supplier and you, including freight, insurance, customs duty, VAT, port handling, customs clearance, and local delivery.
This is the number that matters for your import buying decision. It is the real cost you pay.
Many importers ignore landed cost before placing an order, which leads to expensive surprises. An Italian sofa advertised at €3,000 sounds affordable until you realise it actually costs R95,000+ by the time it lands in Cape Town. Knowing your landed cost before you commit to an order is essential.
Landed cost determines whether an import makes financial sense. If you are a retailer, it directly affects your profit margin. If you are an interior designer specifying goods for a client, it affects your quote. If you are a collector or gallery owner, it affects your acquisition budget.
The landed cost can be 30–50% higher than the supplier’s quoted price, depending on the product type, origin, and whether your goods attract duty.
Compare these two scenarios:
Scenario 1: You don’t calculate landed cost
You see a sofa on an Italian furniture website for €3,000. You think “that’s about R60,000”, and you order it. Four months later, it lands in Cape Town. Customs duty, VAT, handling, and freight bring the total to R95,000. Your supplier’s price quote didn’t include these costs.
Scenario 2: You calculate landed cost first
Before ordering, you ask JLog to calculate the landed cost. We tell you €3,000 + freight + duty + VAT = R95,000. You now know the real cost. You can decide whether to proceed, negotiate with the supplier, or source locally.
The second approach saves you from unpleasant surprises and allows you to make informed decisions.
Landed cost has eight main components:
Let’s calculate the true cost of importing a designer sofa from Milan, Italy.
| Product Cost (EXW Milan) | On request |
| International Freight (Sea, Milan to Cape Town) | R12,000 |
| Cargo Insurance (0.75% of CIF) | R514 |
| CIF Value | R68,914 |
| Customs Duty (20% of CIF) | R13,783 |
| Import VAT (15% of [CIF + Duty]) | R12,304 |
| Port Handling (Cape Town) | On request |
| Customs Agent Fee (Clearance & documentation) | On request |
| Local Delivery (Cape Town to your address) | R1,200 |
| TOTAL LANDED COST | R104,201 |
Key insight: The €3,000 sofa costs a quoted amount (approximately €5,900) by the time it reaches you. That is a 85% increase on the supplier price. Many importers quote clients based on the €3,000 price, not realising the real cost is nearly double.
Now compare the sofa to an artwork import. The structure differs in two ways. First, original artworks classified under HS 9701 (paintings, drawings, pastels, mosaics — whether antique or current) attract 0% MFN customs duty under Schedule 1 Part 1 of the Customs and Excise Act, and a 0% rate also applies under the SADC, EU and EFTA preference columns. Second, VAT treatment depends on the importer — not the artwork. A VAT-registered importer (e.g. a gallery importing trading stock) accounts for 15% import VAT on the ATV and can usually claim an input deduction if the artwork is held as trading stock. A non-vendor importer pays the 15% import VAT and cannot reclaim it. The worked example below shows both scenarios.
| Customs Value (FOB London) | R50,000 |
| International Freight (Air, London to Cape Town) — outside the duty base | R4,500 |
| Cargo Insurance — outside the duty base | R385 |
| Customs Duty (0% — HS 9701, Schedule 1 Part 1) | R0 |
| ATV = Customs Value + 10% uplift + non-rebated duty | R55,000 |
| Import VAT (15% of ATV) — paid at clearance | R8,250 |
| Input VAT claimed back by the gallery | −R8,250 |
| Net VAT cost to the gallery | R0 |
| Port/Cargo Handling | R1,200 |
| Customs Clearance & Certificate of Authenticity Verification | R3,500 |
| Local Delivery (Cape Town to gallery) | R800 |
| TOTAL LANDED COST (after VAT input recovery) | R60,385 |
| Customs Value (FOB London) | R50,000 |
| International Freight (Air, London to Cape Town) — outside the duty base | R4,500 |
| Cargo Insurance — outside the duty base | R385 |
| Customs Duty (0% — HS 9701, Schedule 1 Part 1) | R0 |
| ATV = Customs Value + 10% uplift + non-rebated duty | R55,000 |
| Import VAT (15% of ATV) — payable, NOT recoverable | R8,250 |
| Port/Cargo Handling | R1,200 |
| Customs Clearance & Certificate of Authenticity Verification | R3,500 |
| Local Delivery (Cape Town to collector) | R800 |
| TOTAL LANDED COST | R68,635 |
Key insight: Same artwork, two different landed costs depending on the importer’s VAT-vendor status. The R8,250 import VAT is real money paid to SARS at clearance for both parties; the difference is whether it can be recovered as input VAT (vendor gallery: yes; private collector: no). The popular shorthand “artworks are VAT-exempt” is incorrect — VAT applies; its net cost depends on the importer’s status.
Note on second-hand artworks: where a VAT vendor (e.g. a gallery) acquires a second-hand artwork from a non-vendor seller (e.g. an estate or private collector), the vendor may claim a notional input VAT deduction on the purchase. If that artwork is subsequently exported, the SARS VAT refund on the export is reduced by the notional input already claimed, to prevent double recovery. Galleries with second-hand stock should run the export-VAT treatment past their tax practitioner before invoicing.
You will often hear the term CIF value. Understanding this is crucial because SARS uses the CIF value to calculate customs duty.
The CIF value is the value used by SARS to apply the duty percentage. If the CIF is R68,914 and the duty rate is 20%, SARS collects 20% of R68,914 = R13,783.
This is important because overstating or understating the CIF value changes the duty owed. If you understate the CIF to avoid duty, SARS may audit and re-calculate, resulting in penalties. If you overstate it, you pay more duty than required.
Always provide accurate CIF values. JLog can verify them before you import.
Goods imported from the European Union may qualify for reduced or eliminated duty rates under the EU-SADC Economic Partnership Agreement (EPA), provided they meet rules of origin requirements.
For example:
To claim a preferential rate, you must provide a valid certificate of origin from the EU supplier confirming the goods meet EPA rules. This certificate is submitted to SARS at import.
If your EU supplier can provide a certificate of origin, the duty savings can be substantial. JLog can verify whether your goods qualify and guide the documentation process.
Always calculate your landed cost before placing an order. Here is the process:
JLog provides free landed cost estimates. This is not a sales tool — it is a genuine service to help you make informed import decisions. If the landed cost is too high, you might negotiate with the supplier, source locally, or pass on the import.
Yes. JLog provides free landed cost estimates for prospective importers. Send us:
We will calculate the total landed cost including duty, VAT, freight, insurance, and all handling fees. This gives you the true cost before you commit to an order.
Yes — but “duty-free” and “VAT-exempt” are separate questions. Several categories carry 0% MFN customs duty under Schedule 1 Part 1:
VAT, by contrast, is determined by the importing party’s VAT-vendor status, not by the item. A VAT-registered importer (e.g. a gallery importing trading stock) accounts for 15% import VAT on the ATV and can usually claim an input deduction; a non-vendor importer pays the 15% VAT and cannot reclaim it. The popular shorthand “artworks are VAT-exempt” is incorrect — VAT applies, but its net cost depends on the importer’s status.
Most other goods attract customs duty ranging from 0% to 30% depending on product type and country of origin. Some goods also attract anti-dumping duties, which are in addition to the base duty rate.
The EU-SADC Economic Partnership Agreement provides preferential duty rates on goods from EU countries if they meet rules of origin requirements. For example:
To claim the preferential rate, you must provide a valid certificate of origin from your EU supplier confirming the goods meet EPA rules of origin. If your goods qualify, the duty savings can be 20–50% on the base rate. JLog can advise on whether your goods qualify and how to obtain the necessary documentation.
CIF stands for Cost, Insurance, and Freight. It is the value of goods including the purchase price, international freight, and cargo insurance:
CIF = Purchase Price + Freight + Insurance
SARS uses the CIF value to calculate customs duty. The CIF is not the same as landed cost. Landed cost includes CIF plus local handling, VAT, port fees, and other costs incurred in South Africa.
Important: Always declare the accurate CIF value to customs. Understating it to avoid duty is a customs offence and can result in penalties and audit adjustments.
Yes. If you are registered for VAT and the imported goods are for business purposes, you can claim back the import VAT as input VAT on your VAT return. This reduces your effective landed cost.
Examples where VAT is reclaimable:
VAT is not reclaimable if:
If you are VAT-registered, the import VAT is a timing issue rather than a real cost — you pay it at import but claim it back immediately.
Send JLog a product description and supplier quote, and we’ll calculate your landed cost within 24 hours. No obligation. This simple step prevents expensive surprises and helps you make better buying decisions.
Request a Landed Cost Estimate
JLog | Cape Town, South Africa
10 Railway Street, Woodstock, 7925
021 300 6099