The EU's €150 duty-free threshold ended on July 1, 2026. If you've been shipping goods into the EU under that exemption for the last few weeks without adjusting anything, you've been quietly absorbing, or eating, a new charge on every parcel.1 Here's what actually changed, how the new duty is calculated, and what to do about it before it eats further into your margins.
What the old exemption was doing
Until June 30, 2026, any shipment with a declared intrinsic value at or below €150 could enter the EU without paying customs duty. Import VAT was already due on everything, low value or not, since the EU's 2021 ecommerce VAT reform removed the old €22 VAT exemption. But the duty exemption alone was still enough to make direct-from-overseas fulfillment cheap, since duty and VAT are calculated separately and duty was simply zero below the threshold.
The scale was enormous. The European Commission puts 2024 volume at 4.6 billion parcels under €150, roughly 12 million a day, with more than 91% originating in China.1 That's the mechanism that let Shein, Temu, AliExpress, and thousands of smaller direct-to-consumer sellers ship individual orders into Europe with no formal customs entry and no duty line on the invoice.
What replaced it: a flat €3 duty, charged per item
As of July 1, 2026, consignments valued at or below €150 are no longer duty-free. The EU is charging a temporary flat customs duty of €3, and the detail that catches people off guard is that it's charged per item or per tariff line, not per parcel.2
A single-item order, one phone case, one t-shirt, one charger, picks up one €3 charge. A parcel with three different SKUs at three different tariff classifications picks up three €3 charges, even if the whole box is still under €150. If you consolidate a lot of small items into one shipment to save on freight, this is the rule that just made that consolidation more expensive on the duty side.
Because it's a flat fee rather than a percentage, the effective tax rate is regressive. A €12 order with two line items pays €6 in duty, a 50% effective rate. A €140 order with a single line item pays €3, roughly 2%. Low-ticket impulse purchases, the exact category that built the direct-ship ecommerce model, take the biggest proportional hit.
This €3 rate is also explicitly a transitional measure. It runs through July 1, 2028, while the EU builds out its centralized Customs Data Hub. After that, low-value consignments move to standard ad valorem duty, calculated by tariff classification like any other commercial shipment.3 The flat fee is a bridge, not a permanent rate. Build your cost model expecting it to change again in two years.
Why the EU did this
The Council of the EU framed the change around fairness and safety: duty-free entry for a flood of low-value parcels was undercutting EU-based sellers who pay duty on everything, and the volume made it impractical for customs authorities to screen for counterfeit or noncompliant goods.4 Whether or not you buy the framing, the practical result is the same: the compliance and cost gap between a small direct-ship parcel and a formal commercial entry just closed significantly.
It also mirrors, almost exactly, the argument the U.S. used in 2025 to suspend its own $800 de minimis exemption. Both moves target the same underlying pattern: high volumes of low-value parcels moving with minimal customs scrutiny, largely from Chinese platforms, at a scale regulators on both sides of the Atlantic decided they could no longer treat as a rounding error. If you sell into both markets, this is now a structural cost on two continents, not a one-off regional rule.
Who this actually hits
If you're a DTC brand or ecommerce seller shipping orders individually from an overseas factory or fulfillment center straight to EU customers, this lands on every order, not just the big ones. If you're a retailer or manufacturer sourcing components from outside the EU in bulk and clearing them through formal customs entries already, the €3 flat duty on low-value consignments generally isn't your problem. It's built specifically for the direct-to-consumer parcel model.
US-based brands that expanded into EU markets by direct-shipping from a US or Asian warehouse are just as exposed as EU-based sellers. Nothing about this rule cares where your business is registered. What matters is where the parcel starts and who the end customer is.
Marketplaces built on that model are already adjusting. Shein and Temu began pulling back EU ad spend as early as March 2026 in anticipation of the change, and both are shifting inventory toward EU-based warehouses and semi-managed seller programs, the same playbook used to soften the blow of the U.S. de minimis suspension in 2025.5 Smaller sellers without that scale don't have the same option, at least not without a logistics partner to set it up for them.
What to do before your next EU shipment
Model the per-item cost, not the per-parcel cost. Multiply €3 by distinct tariff lines in a typical order, not by shipment count, to see the real hit to your margin.
Reconsider SKU consolidation in a single parcel. Splitting a multi-item order across fewer distinct tariff classifications, where product design allows it, reduces how many €3 charges you accumulate per order.
Look at moving to bulk import plus EU-based fulfillment. One formal commercial entry for a container of inventory, cleared and warehoused inside the EU, can beat paying €3 per item on thousands of individual parcels, depending on volume and margin per SKU.
Get your HS classifications right now. The flat fee is temporary. When it phases out in 2028, duty reverts to standard ad valorem rates by tariff line, and importers with clean classification data will make that transition without a scramble.
Confirm who's filing the declaration. Whether it's your carrier, a customs broker, or your own EORI registration, someone in your chain needs to be submitting accurate per-item data at entry, not defaulting to the flat fee out of convenience when a lower ad valorem rate might actually apply.
Does this apply to gifts or B2B shipments?
Genuine consignments between two private individuals, gifts with no commercial character, remain outside the scope of this change. B2B shipments where the EU buyer is VAT-registered are also excluded from the flat-fee mechanism, since those imports were already going through standard commercial customs procedures rather than the simplified low-value pathway.2 The rule is aimed squarely at business-to-consumer ecommerce parcels, which is most of what was moving duty-free under the old threshold.
None of this makes shipping into the EU uneconomical. It makes the direct-ship-every-order model measurably more expensive than it was on June 30, and it narrows the gap between that model and running goods through a proper customs brokerage process with formal entries. For a lot of sellers, that gap was the entire business case for direct-ship in the first place.
If you're not sure whether your EU order volume is better served by per-parcel duty or a bulk import and local fulfillment setup, talk to us. It's a math problem, and it's worth running the numbers before your Q4 order volume makes the decision for you.
Sources
- Ensuring fairness and safety: €3 customs duty for low-value parcels - European Commission
- EU €3 duty low-value e-commerce parcel imports, 1 July 2026 - VATCalc
- Guidance and legal text on the temporary flat fee on low-value imports - Taxation and Customs Union, European Commission
- Council gives final green light to new customs duty rules for small parcels - Council of the EU
- European Union moves to revoke duty-free status for parcel imports - FreightWaves
