The EU Council puts an end to a cosy loophole. On 11 February, it endorsed a regulation that abolishes the €150 duty-free threshold for parcels arriving from outside the bloc. The measure, long sought by domestic retailers, will force every e-commerce package—no matter how cheap—to carry customs duty.
The legal text enters the EU’s statute book; collection, however, begins on 1 July 2026. From that date each tariff sub-heading contained in a parcel worth under €150 will attract a flat customs charge of €3. A consignment with three different product categories will therefore cost the importer €9 in duty.
Levelling the cart
Makis Keravnos, Cyprus’s finance minister, chaired the ministerial meeting. “As global e-commerce booms, EU customs rules must keep pace,” he said afterwards.
The political logic is plain. The European Commission reckons 4.6 billion small parcels crossed the EU’s borders in 2024, twice the number handled in 2023. Some 91 per cent came from China. Most slipped in duty-free under the €150 waiver, undercutting bricks-and-mortar shops at home.
Domestic sellers grumble that they must charge value-added tax and, for goods made abroad, regular customs tariffs. Foreign web-shops shipping trinkets direct to consumers could dodge those imposts. Abolishing the threshold, officials argue, restores a level playing field. “Abolishing the out-of-date exemption for small parcels will help support EU business and shut down avenues for unscrupulous sellers,” added Mr Keravnos.
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A stop-gap fee
Because the bloc’s ambitious Customs Data Hub will not be up and running until 2028, ministers plumped for an interim fix. The €3 charge is deliberately simple. It spares customs officers the chore of consulting the Common Customs Tariff on every packet of socks or silicone phone cases.
The regulation even sets out an example. A parcel containing one silk blouse and two woollen ones comprises two distinct tariff sub-headings. The importer therefore pays €6 duty. The simplicity pleases treasuries, too: customs revenue counts as a “traditional own resource” for the EU budget, and member states keep a slice as collection costs.
Once the Data Hub is live—and with it a new EU Customs Authority—the flat rate will vanish. Normal tariff rates will then apply, possibly raising or lowering the ultimate bill depending on the product. The Council left itself room to extend the interim fee beyond 1 July 2028 if the grand project slips.
The price of convenience
For firms built on cross-border drop-shipping, the change is painful. A €3 charge on a €10 gadget inflates landed cost by 30 per cent. Multi-SKU orders that once cruised in duty-free now stack levies: three headings, three fees. Some member states, notably Italy and Romania, are toying with an extra €2 handling surcharge, boosting the minimum fixed cost to €5.
Logistics operators expect to pass on their own paperwork expenses. Every parcel, however tiny, will need a full H7 customs declaration: proper Harmonised System code, origin, value and parties involved. The simplified H6 dataset that suited low-value consignments disappears. Carriers warn of longer queues at border hubs if data are wrong.
Abolishing the out-of-date exemption for small parcels will help support EU business and shut down avenues for unscrupulous sellers. — Makis Keravnos, Cyprus’s finance minister
Consumers may feel the friction first. Sellers face a choice: absorb the fee, display it at checkout or bill it on delivery. Surprise charges invite angry reviews and soaring return rates. Parcels delayed for document correction could sit in warehouses for a week, an eternity in the age of instant gratification.
Tactics for traders
Some businesses are already tweaking their supply chains. Shifting inventory into EU fulfilment centres turns dutiable imports into domestic shipments. Asian platforms are leasing space in Poland, Czechia and Spain for that reason. Others bundle products so that one tariff code covers the lot, or nudge customers to consolidate orders rather than buy piecemeal.
Pricing software is being rewritten to hide the duty in the final price. Marketplaces flirt with geo-pricing: a phone case bought in Berlin might list at €7.90, the same case in Paris at €8.20, the difference reflecting local surcharges. Behind the scenes, finance departments update cost-of-goods forecasts to account for the new drain on cash.
All this is only a rehearsal. When the Data Hub launches, the interim levy will give way to the full Common Customs Tariff. Importers will then confront a thicket of rates, quotas and preferential rules of origin. Those who invest now in clean product data and automated filing will glide through; laggards risk another unpleasant jolt.
Awaiting the hub
The customs reform package is still under negotiation with the European Parliament. MEPs are haggling over governance of the new authority, privacy safeguards for the vast data trove and the mooted handling fee. Yet the Council’s vote shows member states can still act where interests align. The flat duty is small, but the principle—no more free ride for sub-€150 parcels—is big.
Europe likes to style itself the global referee of digital trade. In this corner at least, it has blown the whistle.
