EU customs reform for low-value imports: A structural shift for e‑commerce supply chains

Recently, the EU Commission released its legislation on the reform of its customs framework for low-value consignments. This represents a fundamental shift in how cross-border e‑commerce operates and, while the immediate attention has focused on the introduction of a €3 customs duty, the wider implication is a move away from a consumer-paid import model toward a system where sellers and platforms are expected to manage both compliance and cost. 

From 1 July 2026, the €150 customs duty relief threshold will be withdrawn and replaced by a temporary €3 duty per “item”, with “item” defined by tariff classification rather than by parcel. This effectively brings all imports within the scope of customs duty, eliminating the previous advantage that supported high-volume, low-value direct-to-consumer supply chains which has seen a significant rise since Covid, negatively impacting many EU-based retailers who are unable to compete due to rising business costs. 

Although the charge is modest, it represents a structural change with the EU seeking to level the playing field between domestic and non-EU sellers.  It also helps to address compliance risks and the operational strain created by billions of low-value parcels entering the EU each year. 

The commercial impact could be significant. Increased customs compliance, product safety enforcement, and administrative complexity will place greater pressure on overseas sellers, while EU consumers may ultimately face higher prices and reduced product choice.

A shift in responsibility: from consumer to seller

Under the new framework, the EU is expecting the declarant (typically the seller, platform or their agent) to be responsible for ensuring the duty is paid. 

This mirrors the direction already taken under the Import One Stop Shop (IOSS) VAT regime, where VAT is collected at checkout and centrally reported. Although customs duty is not yet integrated into IOSS, the practical effect is similar: import costs are increasingly expected to be built into the sales transaction rather than recovered at the border. 

This creates a strong incentive to move toward Delivered Duty Paid (DDP) models. Where this does not occur, carriers are likely to continue advancing duty and recovering it from either the customer or the seller, often with additional charges and administrative complexity. 

Many overseas sellers are likely to be reluctant to move to DDP because of the additional customs compliance burden. However, DDP may still prove to be the most effective way to shield the consumer from unexpected delivery charges while ensuring the full import cost is passed through in the sale price. Early discussions with clients suggest that the main concern is not simply who pays the duty, but how that duty will be calculated at import, particularly where there may be scope to group products under a single tariff subheading. For many businesses, this calculation exercise is becoming the real headache ahead of July 2026, and some are already questioning whether the application of standard duty rates would in fact create less complexity than the temporary €3 model. 

How will the €3 duty be collected in practice? 

A key question for businesses is whether the €3 duty introduces a new tax or collection mechanism. The legislation itself does not establish a separate system for collecting this charge. Instead, it confirms that the €3 duty is treated as a standard customs duty within the existing Union Customs Code framework. 

This position is supported by technical guidance issued by national customs authorities. For example, guidance published by the Belgian Finance Ministry confirms that the €3 duty is applied as tax type “A00”, i.e. standard customs duty, within the customs declaration. 

This is a critical point. It demonstrates that the €3 duty is not a standalone fee, nor is it collected through a separate reporting mechanism such as IOSS. Rather, it is fully integrated into the customs declaration process and forms part of the customs debt at import. 

In practice, low-value consignments will therefore create customs liabilities much like full import declarations, even where simplified declaration datasets are used.

The result is effectively a hybrid model: simplified declarations combined with full customs liability. Many businesses may underestimate the legal and financial implications of this shift, particularly those that historically treated low-value imports as relatively low-risk customs movements.

Administration and handling charges

The €3 duty may also represent only part of the future cost burden.  

Although the legislation does not formally introduce an EU-wide handling fee, wider policy discussions indicate that additional administration charges remain under consideration, with further announcements expected before the proposed November 2026 implementation period. 

This would sit alongside carrier clearance and advancement fees already charged in many import models. 

Businesses could therefore face layered import costs comprising: 

• the €3 customs duty;

• import VAT;

• carrier administration fees; and

• potentially, a future EU handling charge.

If additional handling fees are introduced, it would reinforce the EU’s broader strategic direction: discouraging fragmented low-value direct imports and encouraging overseas sellers to hold inventory within the EU instead. 

Marketplace versus direct sales models 

The impact of the reform will vary depending on how goods are sold into the EU. 

For marketplace sellers, compliance is likely to become increasingly centralised. Platforms already manage VAT collection under IOSS and are expected to expand this role to incorporate customs duty into checkout pricing. This provides a more seamless customer experience but reduces control for sellers. 

For businesses selling directly through their own websites, the burden is greater. These sellers will need accurate tariff classifications, robust product data, and pricing models capable of reflecting customs costs correctly. 

Operational challenges – systems and pricing 

The reform introduces significant operational complexity. Businesses must now calculate duty at a product classification level, requiring accurate tariff coding and more robust product data. 

Although €3 appears modest, its impact increases with volume and product mix. For low-margin goods, particularly those sold in bundles or multi-line orders, this can materially affect profitability. 

The greatest risk lies in the practicalities. Businesses with hundreds of product lines, each carrying different commodity codes and potentially different countries of origin, may face thousands of possible duty permutations, none of which can be forecast easily to produce a single standard customs duty amount per consignment. The additional cost of adapting websites, pricing engines and third-party software for what is, at least initially, a temporary measure will itself increase supply chain costs. For many sellers, this will strengthen the case for holding stock in the EU, both to reduce customs duty friction and to simplify data, accounting and compliance requirements. 

Rethinking supply chains 

The most significant long-term effect of the reform may be its impact on supply chains. Direct-to-consumer shipping from non-EU jurisdictions has been enabled by the absence of duty on low-value consignments. That model is now under pressure, both in the EU and globally (just look at the United States!). 

With every parcel subject to duty and full customs treatment, the economic case for shipping goods individually into the EU weakens. In response, we are expecting businesses to review the benefits of shifting toward EU-based inventory models, thereby importing goods in bulk and distributing domestically. 

This approach removes repeated customs clearance, improves delivery speed, and aligns with VAT reporting simplifications such as OSS. It is therefore particularly attractive for high-volume, low-margin sectors such as electronics and consumer goods. 

Returns: an overlooked cost risk 

One potentially overlooked aspect of the legislation concerns returns. The legislation specifically limits the ability to invalidate customs declarations after release for free circulation. In practice, this means that customs duties on returned goods are unlikely to be recoverable in standard scenarios. 

For e-commerce businesses with high return rates, this creates a new structural cost. Returns will no longer be purely a logistics issue; they become a customs cost consideration affecting pricing, refund policies, and margins.

 A transitional regime with further change ahead  

Importantly, the €3 duty is intended as a temporary measure pending implementation of the wider EU Customs Reform package and the future EU Customs Data Hub, currently expected around 2028. The legislation also includes a formal review expected in October or November 2026.