Overview
The EU just put a price tag on the business model that turned “free shipping from China” into a daily habit. On 12 December 2025, EU governments approved a temporary €3 customs duty on low-value e-commerce parcels under €150—starting 1 July 2026.
This isn’t about three euros. It’s about the EU admitting its border system can’t police billions of tiny shipments, then rewriting the rules so the platforms—not overworked customs officers and unsuspecting consumers—carry the burden, the liability, and eventually the full duties.
Key Indicators
People Involved
Organizations Involved
Where EU governments turn political panic into border rules.
The rule-writer trying to make 27 customs systems act like one.
The political amplifier turning “customs overload” into “platform accountability.”
The poster child for direct-from-China shopping that EU policymakers want to re-price.
A fashion giant built on small parcels—exactly the system the EU is re-engineering.
Timeline
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€3 duty goes live
Rule ChangesThe temporary €3 charge becomes payable on qualifying low-value parcels entering the EU.
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Council approves temporary €3 duty on small parcels
LegalEU governments adopt a flat €3 customs duty for low-value parcels under €150, starting 1 July 2026, initially focused on IOSS-registered non-EU sellers.
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EU finance ministers agree to abolish the €150 customs threshold
Rule ChangesThe Council commits to charging duties “from the first euro” once the EU customs data hub is operational, and promises a temporary solution in 2026.
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Parliament demands tougher controls on non-EU web-shop goods
StatementMEPs support removing the €150 relief and warn any handling fee must be WTO-compliant and not paid by consumers.
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Member states agree negotiating mandate on customs reform core
LegalThe Council backs key pieces like an EU Customs Authority and an EU Customs Data Hub to centralise risk management.
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A €2 handling-fee idea enters the political bloodstream
Rule ChangesThe Commission advances a per-parcel fee concept to fund border checks, separate from tariffs and duties.
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Commission publishes an “e-commerce toolbox”
StatementBrussels cites 4.6 billion low-value consignments in 2024 and calls for faster customs reform and enforcement.
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Commission proposes the big customs reset
Rule ChangesThe Commission proposes a new data-driven customs system, including ending the €150 duty relief and shifting responsibilities toward platforms.
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EU kills the €22 VAT-free loophole and rolls out IOSS
Rule ChangesVAT becomes due on all imports, and IOSS is introduced for low-value distance sales up to €150.
Scenarios
EU Customs Data Hub Launches; €150 Loophole Dies for Good
Discussed by: EU institutions; national finance ministries; trade press tracking the customs reform timeline
The permanent customs reform advances through trilogues, the EU Customs Data Hub becomes operational, and the €150 relief is abolished in practice. The big trigger is technical readiness: once duties can be calculated and enforced at scale, “temporary” charges get replaced by normal tariffs on all low-value goods, and platforms face “deemed importer” style obligations.
€3 Becomes €4–€5 (and Spreads Beyond IOSS)
Discussed by: Council and member-state officials; reporting highlighting potential extensions and reassessments
Fraud and volume keep rising, and politics turns the €3 fee into a ratchet: either the rate increases, or the scope expands to cover parcels from traders not registered in IOSS. The trigger is the Commission’s periodic assessment plus member-state pressure from overwhelmed customs services and retailers demanding a harder line.
Platforms Pivot: ‘Ship to EU Warehouses’ Replaces ‘Ship to Door’
Discussed by: European Parliament recommendations; logistics and VAT/customs compliance analysts
Temu/SHEIN-style sellers respond rationally: fewer split shipments, more consolidated bulk imports into EU warehouses, and more EU-based fulfillment to reduce per-parcel cost exposure and simplify customs friction. The trigger is unit economics: once every separate box has an unavoidable charge, the cheapest strategy becomes changing the supply chain—fast.
China Pushes Back; EU Defends the Fee as Neutral ‘Border Hygiene’
Discussed by: Trade diplomats and coverage of EU–China trade tensions; analysts watching WTO-risk arguments around parcel fees
Beijing frames the policy as discriminatory industrial protection, while the EU insists it’s non-discriminatory and tied to enforcement costs and fraud. The trigger is escalation elsewhere (subsidy probes, DSA enforcement, anti-dumping actions) that turns a technical customs measure into a broader political fight.
Historical Context
EU VAT e-commerce reform and the end of the €22 VAT exemption
2021-07What Happened
The EU ended VAT-free import treatment for low-value goods and introduced IOSS to collect VAT at checkout for many imports up to €150. The goal was fairness and fraud reduction, but customs-duty relief under €150 still left a major price advantage for direct-shipped goods.
Outcome
Short term: VAT collection improved, but parcel volumes continued to surge.
Long term: The remaining €150 customs-duty relief became the next obvious loophole to close.
Why It's Relevant
It shows the EU’s step-by-step strategy: first VAT, then customs duties, then platform liability.
Australia’s GST on low-value imported goods
2018-07What Happened
Australia extended GST to many low-value imported goods purchased online, pushing platforms and sellers to register and remit tax. The reform aimed to remove the tax advantage enjoyed by overseas sellers shipping directly to consumers.
Outcome
Short term: Compliance burdens shifted toward platforms and large sellers.
Long term: The market adapted through registration, pricing changes, and altered fulfillment models.
Why It's Relevant
It’s a blueprint for how consumers barely notice the rule—until the supply chain quietly reorganizes.
U.S. crackdown on de minimis and resulting postal disruption
2025-08What Happened
A sharp U.S. policy shift around low-value imports created confusion over collection and procedures, leading some postal operators to suspend shipments. It exposed how fragile cross-border small-parcel logistics can be when rules change faster than systems.
Outcome
Short term: Operational disruption and sudden price shocks for cross-border sellers.
Long term: Stronger incentives to warehouse domestically and consolidate shipments.
Why It's Relevant
It previews the EU’s key risk: implementation mechanics can matter as much as the policy headline.