On 1 July 2026, the EU will begin levying a flat customs duty of EUR 3 on goods contained in consignments valued at EUR 150 or less entering the EU. The measures outlined in this blog are set out in Council Regulation (EU) 2026/382, as well as in the updated UCC-IA and UCC-DA. They remove the long-standing customs duty exemption for low-value imports and marks the first concrete step in the EU’s broader customs reform agenda.
The customs duty is an interim measure that will remain in place until July 2028, pending the implementation of a permanent regime under which standard EU customs tariff rates will apply to all imports regardless of value.
Background
The customs duty relief for low-value consignments was originally designed for a pre-digital trade environment. While the corresponding VAT exemption was already eliminated in 2021 with the introduction of the Import One-Stop Shop (“IOSS”), the customs duty relief remained in place.
The rapid growth of cross-border e-commerce has made the continued application of this threshold increasingly untenable. An estimated 5.9 billion low-value items entered the EU in 2025, placing significant pressure on customs systems. Key concerns driving the reform include distortions of competition between EU and non-EU sellers, widespread fraud and undervaluation practices (including shipment splitting), health and safety risks for consumers, and capacity constraints for customs authorities managing high-volume parcel flows.
Key Features of the EUR 3 Customs Duty
The measure targets primarily business-to-consumer (B2C) e-commerce imports. The key features are as follows:
- Scope. Goods entering the EU in low value consignments and valued at EUR 150 or less will be subject to a fixed EUR 3 customs duty, where either (i) IOSS is used or where (ii) the goods are contained in postal consignments. Thus, the measure is primarily designed to target high-volume e-commerce flows and should encompass 93% of all e-commerce flows to the EU.
- Declarant and customs debtor. Where IOSS is used, the declarant is the party using the IOSS number, which is also treated as the customs debtor for the EUR 3 customs duty. Where IOSS is not applied and the goods are declared under the special VAT arrangements for postal consignments, the postal operator (or its representative) will typically act as declarant
- EUR 3 per product category (tariff classification on 6-digits level). The customs duty operates on a per-item rather than per-parcel basis. In practice, this means per CN code line on the customs declaration, not per physical unit. Goods sharing the same CN code (and, where required, the same country of origin) can be aggregated on a single line and incur only one EUR 3 charge. Consignments containing goods falling under different tariff sub-headings may incur multiple EUR 3 charges.
- Temporary application. The measure applies from 1 July 2026 to 1 July 2028, pending the entry into force of the permanent customs reform regime.
- Distinct from the proposed handling fee. The EUR 3 customs duty is separate from the proposed EUR 2 Union-wide “handling fee” currently under discussion as part of the broader customs reform package.
- Anti-circumvention. Structuring imports in a way that aims to evade the EUR 3 customs duty is expressly addressed by an anti-abuse rule. Authorities are expected to look through arrangements designed to artificially keep consignments below the EUR 150 threshold or to disguise distance sales as other types of flows, including through the grouping or splitting of shipments and bulk imports of goods that are in substance destined for final consumers.
- Product Identifiers (PIDs) from 1 November 2026. In parallel, mandatory Product Identifiers will need to be reported per line item for affected low value consignments valued at EUR 150 or less, requiring further adaptation of declaration data.
Impact on Businesses
For all businesses involved in cross-border B2C imports into the EU, including e-commerce businesses, non-EU sellers, online marketplaces, logistics providers and customs brokers, the practical implications include:
- Increased landed cost of low-value imports, particularly for low-margin, high-volume products. Businesses should assess the effect on pricing strategies, shipping structures and e-commerce operating models.
- Tariff classification and origin accuracy becomes critical, as the customs duty is applied per declaration line (depending on the tariff sub-heading and, for H1, also on the origin), based on the data set. Businesses should review product catalogues to ensure correct codes and origins are assigned.
| Data set | Tariff classification | Product | Origin | EUR 3 duty | Total |
| H1 | 6104 1990 10 | Women’s suit of artificial fiber (1) | TW | 1 x | EUR 9 |
| 6104 1990 20 | Women’s suit of wool (1) | TW | 1 x | ||
| 6104 1990 20 | Women’s suit of wool (1) | CN | 1 x | ||
| H6 | 6104 1990 | Women’s suit of artificial fiber (1) and of wool (2) | N/A | 1 x | EUR 3 |
| H7 | 6104 19 | Women’s suit of artificial fiber (1) and of wool (2) | N/A | 1 x | EUR 3 |
- VAT and IOSS compliance are essential and must be reviewed. Businesses not yet registered may consider doing so ahead of the go-live of July 1.
- Recharacterization risk for B2B flows. While the EUR 3 customs duty is primarily aimed at B2C e-commerce, the distinction between B2B and B2C is not always straightforward in practice. Certain flows currently treated as B2B may, depending on the underlying facts, be recharacterized as B2C and fall within the scope of the new customs duty. In addition, although B2B flows remain outside the scope of the EUR 3 customs duty, the abolition of the de minimis customs duty exemption means that standard customs tariffs will now apply to low-value B2B imports as well.
- Returns costs may increase, as the customs duty is no longer non-refundable on returned goods (unless for faulty goods).
Impact on VAT taxable base
- The EUR 3 customs duty can impact the VAT taxable base of low value consignments of imported goods not exceeding EUR 150. For the purpose of calculating the VAT taxable base, it is relevant whether the business makes use of the IOSS:
- IOSS is not used (i.e. in postal consignments principally using the special VAT arrangement): When the business does not use the IOSS, the EUR 3 customs duty is included in the taxable base for the purposes of calculating the import VAT due upon importation of the goods into the EU.
- IOSS is used (i.e. a distance sale is given): When the IOSS is used, no import VAT is due upon importation of the goods into the EU. Instead, the distance sales of imported goods must be reported through the businesses’ IOSS return. Under this scenario, the EUR 3 customs duty is in itself not included in the VAT taxable base of the supply.
- The European Commission is however silent on whether the EUR 3 customs duty should be included in the VAT taxable base if this duty is recharged by the business to its customers.
Key Takeaways
- The EUR 3 flat customs duty takes effect on 1 July 2026, ending duty-free treatment for consignments valued at EUR 150 or less.
- The customs duty applies per tariff sub-heading (and possibly the origin, depending on the data set), not per parcel, and is charged per declaration line, meaning multi-item consignments may incur multiple charges.
- The measure is expressly temporary (until July 2028) and is distinct from the separately proposed EUR 2 handling fee.
- Businesses should assess the impact on pricing, tariff classification, shipping structures, VAT and IOSS compliance ahead of the go-live.
- The removal of the de minimis exemption represents a structural shift in EU customs policy. Businesses should begin preparing for the permanent regime.
- In contrast to the legally binding Regulation, the European Commission’s guidance indicates a broader policy objective, suggesting that the EUR 3 customs duty should apply to distance sales more generally, irrespective of the VAT collection mechanism used (e.g. IOSS, special arrangements or standard VAT reporting). This creates a degree of tension between the legally binding text of the Regulation 2026/382 and its administrative interpretation (and presumably indicates the future pathway with regards to flat duties).
We are closely monitoring these developments and will provide further updates as additional guidance is published.
