The EU Just Ended Duty-Free Shipping for Low-Value Orders

The EU removed the duty-free exemption on low-value imports on 1 July 2026. Every parcel valued under €150 shipped into the EU from outside now attracts a flat €3 customs duty per item. That might sound modest, but the implications for merchants selling cross-border are more significant than the number suggests.

What Actually Changed

Until 30 June, the EU exempted parcels worth €150 or less from customs duty. VAT still applied via IOSS, but duty was waived entirely. That exemption is now gone. From 1 July 2026:

• A flat €3 customs duty applies to every item shipped into the EU from outside the EU
• The duty applies per item, not per parcel — an order with three products could attract up to €9 in duties
• Items sharing the same HS6 tariff classification can be grouped on a single customs declaration line for a single €3 charge
• The €3 rate is a temporary measure, currently expected to apply until July 2028 when broader EU customs reform takes effect

One thing worth calling out clearly: IOSS does not cover this duty. IOSS is a VAT simplification scheme. The €3 customs charge is an entirely separate obligation. If you're registered for IOSS and assumed that covered your cross-border compliance, it doesn't. You need both.

What This Means for Your Store

The economics of shipping low-value orders into the EU have changed overnight. Here's where the impact actually lands:

• Landed cost increases on every EU order. A €25 product now carries an additional €3 duty on top of VAT. For high-volume, low-margin products, that adds up fast.
• Customer experience is at risk. If customers aren't told about duties at checkout and get hit with them at delivery, you'll see returns, complaints, and abandoned repeat purchases.
• Tariff classification matters now. If you've been shipping low-value parcels without carefully assigning HS6 codes, that needs to change. Every shipment needs a proper customs declaration.
• Check what your carrier is actually doing. Not every logistics partner updated their processes for July 1. Worth confirming how they're handling customs declarations on your low-value shipments.

€3 sounds small until you run the numbers on your EU order volume. On 500 parcels a month, that's €1,500 in additional duties landing somewhere in your supply chain.

The UK Situation (It's a Separate Track)

The UK still has its £135 duty relief threshold in place, currently scheduled to remain until March 2029. If you're selling to UK customers only, nothing has changed right now.

But the direction of travel is obvious. The UK is following the EU here, just a few years behind. For merchants selling into both markets, you're already managing two compliance frameworks. Post-Brexit, the gap between them has just widened further. That's worth building into your planning now rather than scrambling for it in 2028.

What to Do Right Now

1. Check your checkout pricing for EU customers. If you collect duty at checkout, the calculation needs updating for the €3 charge. If you don't collect it at checkout, you're likely creating a bad delivery experience.
2. Audit your HS6 tariff codes. Every product shipped into the EU needs proper classification. Items under the same code can be grouped on one declaration line, which reduces the duty hit on multi-item orders.
3. Talk to your logistics partner this week. Confirm they're issuing customs declarations correctly for sub-€150 shipments. If they're not, find out what they need from you to fix it.
4. If you use IOSS, understand it only covers VAT. The €3 duty needs a separate mechanism — your carrier or customs broker should be handling this, but it's worth confirming explicitly.

The Throughline

The €3 rate is a holding measure. The EU has said as much — it's a stopgap until a more comprehensive customs reform arrives in 2028. The direction is clear: the era of duty-free low-value ecommerce into Europe is ending. This is the start of that process, not a one-off.

If your EU sales are a meaningful part of your revenue, the compliance overhead has just increased. That's not a reason to pull back from European markets, but it is a reason to make sure you have a clear picture of your landed costs, your logistics provider's processes, and what your EU customers are seeing at checkout. The brands that get this right will have an edge over the ones that are still working it out at delivery.

For a detailed breakdown of the changes and a compliance checklist, Zonos has a solid explainer worth reading.