Removal of the €150 Customs Duty Exemption For Low-Value E-commerce Consignments

The European Union has reached a political agreement to remove the €150 customs duty exemption for low-value e-commerce parcels imported from non-EU countries. The change will take effect from 2026, initially as a temporary solution, and will be fully integrated into the new EU Customs Data Hub, expected to be implemented around 2028.

This reform will reshape how low-value parcels are priced, declared, and delivered, and it directly affects cross-border e-commerce, marketplace sellers, and EU retailers competing with ultra-cheap imports.

What Is The €150 Customs Duty Exemption?

The current rule

Today, when a parcel is shipped from a non-EU country to a consumer in the EU:

• If the intrinsic value of the goods is below €150, no customs duty is charged.
  
• VAT is still due from the first euro, based on the 2021 EU e-commerce VAT reforms.
  
• A customs declaration is still required, but duty calculation is skipped for these low-value consignments.
  

This exemption is known as the de minimis customs threshold.

Why the EU is abolishing the €150 threshold

EU institutions argue that the exemption no longer fits today’s e-commerce landscape:

• Massive growth in small parcels from non-EU platforms.
  
• Systematic undervaluation to stay under €150.
  
• Splitting orders into multiple parcels to avoid duty.
  
• Competitive pressure on EU retailers who pay duties correctly.
  

Up to 65 percent of small parcels are believed to be undervalued, and around 91 percent of sub-€150 shipments in 2024 originated from China. The objective is to level the playing field, reduce fraud, and eliminate incentives for fragmented shipments.

Timeline: When Will The €150 Customs Threshold Disappear?

2026: Early application through a temporary solution

On 13 November 2025, EU finance ministers reached a political agreement to abolish the exemption as of 2026, earlier than initially foreseen.

Key points:

• A temporary mechanism will be introduced in 2026 to start collecting customs duties on low-value parcels.
  
• The goal is to begin charging duties as early as possible in 2026.
  
• Member States are considering a simple flat customs or handling fee per parcel during this transition phase.
  

2028: Full integration into the EU Customs Data Hub

As part of the broader EU customs reform:

• The EU Customs Data Hub is expected to be operational around 2028.
  
• Once active, the €150 exemption will be removed entirely from legislation.
  
• Low-value parcels will be processed under the whole customs regime using shared EU-wide data.
  

Who Will Be Affected?

EU consumers

• More non-EU parcels will carry customs duty in addition to VAT.
  
• Carriers may add handling or presentation fees.
  
• Ultra-cheap imports will become more expensive, especially in categories with higher duty rates.
  

EU-based online retailers and brands

• A fairer competitive landscape as unfairly cheap imports lose their duty advantage.
  
• Reduced price pressure from under-declared shipments.
  
• EU merchants relying on drop-shipping from outside the EU may face higher costs.
  

Non-EU sellers and marketplaces

• Platforms shipping directly to EU consumers must collect more detailed data and calculate duties and VAT at checkout.
  
• Many platforms will be treated as deemed importers.
  
• Business models driven by fragmented shipments will face structural pressure.
  

Logistics providers and postal operators

• More parcels will require duty assessment.
  
• Systems must integrate with the EU Customs Data Hub.
  
• Parcels may be subject to flat processing fees.
  

How The Change Affects Pricing And Landed Costs

When the exemption is removed, all imported parcels can be subject to customs duty, regardless of their value.

Businesses must consider:

• Goods value.
  
• Shipping and insurance, when applicable.
  
• Duty rate per tariff code.
  
• Any flat handling fees introduced during the transition.
  
• VAT is charged on top of the customs value plus duty.
  

This increases landed cost per unit, especially for:

• Small replenishment orders.
  
• Low-margin products with higher duty rates.
  
• Direct-to-consumer models rely on many small parcels.
  

Companies will need to reassess margins, adjust assortment strategies, and shift stock to EU warehouses.

VAT, IOSS And The Customs Threshold: How They Fit Together

VAT has no de minimis threshold since 2021

Since 2021:

• VAT applies from the first euro on imports.
  
• The Import One-Stop Shop (IOSS) enables sellers to collect VAT at checkout for B2C imports up to €150.
  

Alignment of VAT and customs reforms

The customs reform aligns closely with VAT procedures:

• The €150 limit for IOSS may also be removed so all imported B2C goods become IOSS-eligible.
  
• Platform deemed supplier rules are likely to expand.
  
• Long-term plans focus on calculating VAT and duties upfront for transparency and fraud reduction.
  

Businesses will need to integrate VAT and customs processes more tightly across their systems.

Compliance Checklist For Online Retailers And Marketplaces

Map your exposure

Analyse current shipments from non-EU warehouses and determine which categories rely heavily on low-value consignments.

Clean up product and customs data

Ensure accurate HS codes, customs values and origin data for all SKUs to avoid delays or penalties.

Upgrade checkout and tax engines

Prepare to display duty and VAT estimates at checkout and integrate IOSS where applicable.

Review logistics strategy

Compare fragmented shipments with bulk import models and assess whether EU-based warehousing could reduce costs.

Update contracts and customer communication

Clarify responsibility for duties and taxes and prepare customer service teams for questions about price changes.

Strategic Opportunities In A Post-€150 World

The reform brings challenges but also opportunities:

• Fairer competition for EU-based merchants.
  
• Greater incentives for near-shoring and EU warehousing.
  
• Increased demand for automation and AI in customs classification, risk scoring and landed-cost optimisation.
  
• Improved customer experience by collecting duties upfront.
  

Frequently Asked Questions

Will every parcel from outside the EU pay customs duty?

Yes. All commercial imports can incur customs duty once the exemption is removed, depending on tariff codes and origin.

Does this change affect VAT?

VAT rules already apply from the first euro. However, VAT procedures may be updated to align with the customs reform.

When will parcels become more expensive?

Beginning in 2026 through the temporary mechanism, with full integration by 2028. Costs may rise progressively as carriers adjust their systems.

Is this change only about B2C e-commerce?

No. Any low-value import using the €150 exemption is affected, including B2B shipments of samples or components.

What should businesses do now?

Start mapping exposures, updating customs data, recalculating landed-cost scenarios and preparing checkout systems for duty calculations.