LOW VALUE EXPORTS TO THE EU: NEW RULES

New rules apply to low value consignments entering the EU from 1 July 2026.

The problem

At present, small parcels valued at less than EUR 150 enter the EU duty free, and it’s a key measure for e-commerce. But there are concerns that this is creating unfair competition for EU sellers, and particularly that it is being exploited by online retailers from China. Health and safety risks for consumers, high levels of fraud, and environmental issues are also cited. Estimates suggest, for example, 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.

New policy

The EU therefore intends to remove the low value customs duty exemption altogether. Since, however, this is bound up with wider customs reforms, there is now an immediate temporary scheme in place.

From 1 July 2026 to 1 July 2028, goods entering the EU in small consignments and valued at less than EUR 150, 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 a parcel contains multiple types of 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.

Note that this arrangement may be extended as appropriate until the permanent arrangement comes into effect.

Example: A parcel contains one blouse made of silk and two blouses made of wool. These items have different tariff sub-headings, so the parcel is treated as containing two distinct items, and EUR 6 in customs duty should be paid.

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.

Longer term change

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.