For VAT purposes, dropshipping is not a single purchase but a chain of supplies in which your store is the seller towards the customer — even though you never physically hold the goods. The e-shop therefore carries the VAT responsibility: you need to know where the transport starts and ends, whether it is an import from a third country or a sale within the EU, and set the rate, place of supply and any VAT registration accordingly. Slovakia and Czechia share the EU framework but differ in rates and thresholds, so they are worth comparing side by side.
How does VAT work in dropshipping?
In dropshipping you sell goods held by a supplier — often in China or another EU member state — who ships them directly to your customer. For VAT, a single physical transport carries at least two supplies: from the supplier to your store, and from your store to the customer. This is a chain transaction.
Under both the Slovak VAT Act (Act No. 222/2004, § 13a) and the Czech VAT Act (Act No. 235/2004, § 7), a single transport can be ascribed to only one supply in the chain, which may be an exempt intra-EU supply. The remaining supplies are treated as made without transport and are taxed where the goods are located. Which link the transport attaches to decides where, and to whom, the VAT liability arises — and this is where dropshippers make the most mistakes.
Who is the supplier in dropshipping?
Towards the end customer, you as the store are the supplier, not your Chinese or European partner. The customer contracts with you, you issue the document and you are liable for the VAT on that sale. The fact that the goods never pass through your warehouse changes nothing. This holds equally in Slovakia and Czechia.
Distinguish who you sell to. Selling to consumers (B2C) means dealing with distance sales of goods and the OSS or IOSS schemes; selling to businesses (B2B) brings different rules, including a possible reverse charge. Most dropshipping stores sell to consumers, so that is the focus here.
Where does the VAT liability arise?
The basic rule in both countries is that for goods supplied with transport, the place of supply is where the transport begins. In dropshipping this means what matters is where the goods physically travel from — not where your store is based. If goods leave a warehouse in another member state or are imported from a third country, you may have to register for VAT outside your home country.
The precise outcome depends on the route of the shipment and the VAT numbers used. The rates that then apply differ: Slovakia charges a standard 23 %, Czechia 21 %. For the wider context of doing business across both jurisdictions, see our overview of Slovak tax advisory for companies.
When must you register for VAT?
Registration thresholds differ sharply. Since 1 January 2025 Slovakia applies two calendar-year thresholds: exceeding EUR 50,000 makes you a VAT payer from 1 January of the following year, and exceeding EUR 62,500 makes you a payer immediately, on the day the threshold is crossed.
Czechia mirrors the two-threshold logic with different figures: CZK 2,000,000 per calendar year triggers registration from the following 1 January, while CZK 2,536,500 triggers it immediately, from the day after the limit is crossed. Because dropshipping turnover climbs in jumps, both thresholds are easy to overshoot — and a foreign registration may be added on top.
How is imported stock from China taxed?
If the supplier ships directly from China, the parcel crosses the EU customs border and counts as an import. For distance sales of imported goods with an intrinsic value up to EUR 150, the EU-wide IOSS scheme (Import One Stop Shop) lets you charge VAT at the point of sale and remit it through a single return for the whole EU. This 150 EUR threshold is identical in Slovakia and Czechia.
Without IOSS, the customer pays import VAT on delivery, usually with a carrier handling fee. Example: on a EUR 40 order without IOSS the customer pays extra VAT and a handling charge — an unpleasant surprise that often ends in a returned parcel. Using IOSS therefore streamlines the paperwork and protects the customer experience at the same time.
What if you sell to consumers elsewhere in the EU?
If you ship to consumers in other member states (typically from an EU-based supplier warehouse), watch the single EU-wide threshold of EUR 10,000 per year for distance sales of goods. Below it you charge your home VAT — Slovak 23 % or Czech 21 %; above it you must charge the VAT of the customer's country and remit it through the OSS scheme.
OSS spares you registering in each country separately: one return settles VAT across all member states. The mechanism is identical in both countries — only the domestic rate applied below the threshold differs. For the accounting groundwork behind cross-border trade, see our note on professional accounting in Slovakia.
What VAT mistakes do dropshippers make most often?
The most common error, in either country, is assuming that not holding the goods means VAT is not your problem. It is — towards the customer you are the seller. The second is not knowing where the goods actually travel from, which leads to the wrong place of supply and country of registration.
Underestimating the thresholds is risky too, as dropshipping turnover grows in jumps, and ignoring IOSS on goods from China pushes VAT onto the customer and hurts sales. When in doubt, setting the regime up correctly from the start is cheaper than paying back tax and penalties later.
Launching a dropshipping store and unsure where and how much VAT you owe? Let us walk through the route of your goods and your obligations before the first tax-office query arrives.
FAQ
Do I have to pay VAT when the supplier ships directly from China?
Yes. Towards the customer you are the seller, so the VAT on the sale is handled by your store. If the intrinsic value of the parcel does not exceed EUR 150, you can use the IOSS scheme and charge VAT at the point of sale. Without IOSS, the customer pays import VAT on delivery, which is a frequent cause of returned orders.
When do I become a VAT payer as a dropshipper?
It depends on the country. Slovakia uses calendar-year thresholds of EUR 50,000 (payer from the next 1 January) and EUR 62,500 (payer immediately). Czechia uses CZK 2,000,000 and CZK 2,536,500 with the same logic. On top of the home registration, dropshipping may require registering in another member state depending on where the goods travel from.
What is IOSS and is it worth using?
IOSS is a simplified scheme for distance sales of imported goods up to EUR 150 intrinsic value, letting you charge VAT at sale and remit it in one EU-wide return. It is worth using whenever you ship lower-value goods from third countries directly to customers — the buyer pays nothing extra on delivery and the purchase stays smooth.