The European Union is entering a new phase of customs reform aimed at addressing the unprecedented growth in cross-border e-commerce imports. Beginning on July, 1 2026, low-value parcels entering the EU from non-EU countries will no longer benefit from the long-standing customs duty exemption for consignments valued below €150. Instead, a new fixed customs duty regime will apply to many low-value e-commerce imports, representing one of the most significant changes to EU customs treatment in recent years.
The reform is part of a broader effort by EU institutions to modernize customs administration, improve product safety oversight, combat fraud, and create fairer competitive conditions for European retailers. It also serves as a transitional measure before the implementation of the EU Customs Reform package and Customs Data Hub scheduled for 2028.
Why the EU is changing the rules?
The scale of low-value imports entering the European Union has grown dramatically over recent years. According to EU data, customs authorities processed approximately 4.6 billion low-value parcels in 2024, equivalent to roughly 12 million packages every day. Around 91% of these shipments originated from China and were often sold through large online marketplaces and direct-to-consumer platforms.
EU policymakers have argued that the existing framework creates several challenges:
- Unfair competition for EU-based retailers that must comply with stricter regulatory and tax obligations.
- Increased risks of unsafe or non-compliant products entering the Single Market.
- Significant administrative burdens on customs authorities.
- Opportunities for undervaluation and customs fraud.
- Environmental concerns linked to the rapid growth of individual parcel shipments.
The new measures are intended to address these concerns while preparing customs systems for a more comprehensive digital customs framework in 2028.
The new €3 customs duty
Under the agreement reached by the Council of the European Union, a fixed customs duty of €3 will apply to goods valued at less than €150 entering the EU from third countries starting on July, 1 2026. The measure is temporary and will remain in force until the permanent customs reform framework becomes operational.
A key feature of the regime is that the charge is applied according to tariff classifications rather than simply per parcel. This means a shipment containing products that fall under different customs tariff headings may incur multiple €3 charges. Businesses that sell mixed-product consignments will therefore need to review how goods are classified and declared for customs purposes.
The measure primarily targets goods sold by non-EU sellers using the Import One-Stop Shop (IOSS) system, which currently accounts for the vast majority of e-commerce imports into the Union. VAT obligations under IOSS will continue separately from the new customs duty.
The separate EU handling fee proposal
Businesses should distinguish between the confirmed €3 customs duty and a separate handling-fee proposal currently being advanced by the European Commission.
The Commission has proposed an additional handling fee of approximately €2 for parcels shipped directly to EU consumers from outside the bloc. The purpose of this charge is to help fund customs inspections, compliance checks, and enforcement activities associated with the growing volume of e-commerce imports. A reduced fee of €0.50 has been discussed for goods imported into EU-based warehouses before onward distribution.
Importantly, this handling fee remains subject to the EU legislative process and is distinct from the €3 customs duty already approved by Member States. Current discussions indicate that implementation could occur later in 2026, potentially around November, although final timing will depend on negotiations between the Council and the European Parliament.
Impact on e-Commerce businesses
Non-EU sellers
Businesses shipping directly to EU consumers will face increased landed costs on low-value orders. Sellers relying on ultra-low-cost product strategies may experience pressure on margins or conversion rates as customers become more sensitive to additional import charges.
Online marketplaces
Large marketplaces and platforms will likely bear increased compliance obligations and may need to modify checkout systems, customs data reporting, and pricing structures to accommodate the new customs regime. Many observers expect platforms to encourage greater use of EU-based fulfillment centres as a way to reduce customs friction.
EU retailers
European retailers have generally welcomed the reforms, arguing that they help level the playing field by reducing advantages previously enjoyed by overseas sellers benefiting from low-value customs exemptions.
Consumers
For consumers, the practical effect will likely be higher costs on low-value imports from outside the EU. The impact will vary depending on product value, shipment composition, and whether sellers absorb part of the additional charges. Purchases from EU-based warehouses may become relatively more attractive.
Looking ahead to 2028
The July 2026 measures are not the final destination for EU customs reform. They are intended as a bridge toward the broader Customs Reform Package and the EU Customs Data Hub scheduled for 2028. The future framework aims to create a more centralized and data-driven customs environment, allowing authorities to better monitor imports, enforce product safety rules, and combat fraud.
As implementation approaches, businesses should closely monitor guidance from customs authorities, review product classification procedures, evaluate supply-chain structures, and assess whether EU-based fulfillment strategies could reduce future customs costs.
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