From 1 July 2026, low value consignments entering the EU will be subject to new rules.
Small parcels valued at less than EUR 150 currently enter the EU duty free, which is vital for e-commerce. Concerns have been raised that this is creating unfair competition for EU sellers, and that this is being exploited by online retailers from China. Other concerns with the current system include health and safety risks for consumers, high levels of fraud, and environmental issues. For example, estimates suggest that up to 65% of small parcels entering the EU are undervalued to avoid customs duties on import. There is also concern that non-EU companies are incentivised to split shipments into individual parcels.
Therefore, the EU intends to remove the low value customs duty exemption altogether. However, since this is bound up with wider customs reforms, there is now an immediate temporary scheme in place.
Goods entering the EU in small consignments and valued at less than EUR 150 from 1 July 2026 to 1 July 2028, will be subject to an interim flat rate customs duty of EUR 3. This rate will be applied to all goods entering the EU, for which non-EU sellers are registered in the EU’s import one-stop shop (IOSS) for VAT purposes, per item category. If one parcel contains item fitting into multiple item categories, the duty will stack. There will be regular reviews to see whether the rate should be extended to goods entering the EU sold by traders not registered in the IOSS.
For example, a parcel containing one blouse made of silk and two blouses made of wool has different tariff sub-headings, so the parcel is treated as containing two distinct items, and EUR 6 in customs duty would be due.
This arrangement may be extended until the permanent arrangement comes into effect.
In addition to this flat rate duty, a handling fee is currently under discussion, and if agreed, is expected to come into force from November 2026.
The EU is introducing a wider package of customs reforms, including a new customs data hub. This is due to become operational in 2028. At this point, it is planned that the interim customs duty introduced in 2026 will be replaced by normal customs tariffs.
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