Cross-border ecommerce sellers benefited from a key customs simplification in the European Union: parcels imported into the EU with a value of €150 or less were exempt from customs duties. The European Union has confirmed that the €150 customs duty relief will be withdrawn from 2026, marking a fundamental shift in how low value ecommerce imports are treated.

Understanding the €150 customs duty relief

Under the previous system, goods imported into the EU with a customs value not exceeding €150 were generally free from customs duties. The scale of modern ecommerce has significantly changed this calculation.

Why the EU is removing the duty-free threshold

The decision to abolish the €150 exemption is part of a wider EU customs reform programme. Several factors have driven this change:

Rapid growth in parcel volumes

EU customs authorities now process billions of low value parcels each year, placing immense pressure on clearance systems.

Undervaluation practices

A significant number of shipments are intentionally declared below the €150 limit to avoid duties, resulting in revenue losses and unfair market behaviour.

Introduction of a temporary €3 customs duty (From July 2026)

As part of the transition, EU Member States have agreed on an interim solution for low-value ecommerce imports. From July 2026, a flat €3 customs duty per item will apply to ecommerce parcels valued below €150 that are shipped directly from non-EU countries to EU consumers.

Key points to note:

• The €3 duty applies per item, not per shipment
• It is separate from import VAT
• It is distinct from any future handling or processing fees, which are still under discussion
• The measure is temporary and intended to operate until the EU’s new digital customs infrastructure becomes fully operational

This transitional duty aims to discourage undervaluation, improve compliance, and partially offset the administrative burden on customs authorities.

Detailed timeline of the reform

The change involves several stages rather than a single date of implementation:

• 2025: EU Member States formalised political agreement to abolish the €150 duty relief threshold, setting the stage for phased implementation.
• 1 July 2026: The temporary €3 flat customs duty per item will be applied to low-value e-commerce parcels entering the EU.
• 2026–2028: Transitional period where businesses must adapt systems, supply chains, and pricing structures to reflect new duty charges.
• 2028: The full abolition of the €150 exemption is expected upon the launch of advanced EU customs digital infrastructure, which will support real-time data exchange and centralised customs controls.

Delivery experience and incoterms

Sellers must also weigh the impact on Delivered At Place (DAP) versus Delivered Duty Paid (DDP) models. Under DAP, consumers may be required to pay duties and charges on delivery, which could lead to higher refusal or return rates. DDP offers a cleaner customer experience but demands more advanced duty calculation at the checkout stage.

Interaction with VAT and IOSS

While customs duties are now more broadly applied, the Import One-Stop Shop (IOSS) mechanism remains relevant for VAT collection on distance sales. IOSS simplifies VAT collection at the point of sale and can reduce administrative friction for consumers. However, it will coexist with customs duty obligations, requiring synchronised workflows between VAT reporting and customs filings.

The decision to end the €150 customs duty exemption marks a pivotal shift in EU cross-border trade policy. It represents a move toward greater regulatory oversight, fairer competition, and stronger customs enforcement for the booming ecommerce sector.