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On 1 July 2026, the EU removes the €150 customs duty exemption that has applied to low-value imports for decades. If you sell into the EU through IOSS, this affects you directly.
What's actually changing
The current rule is simple: goods valued under €150 enter the EU customs-duty free. From 1 July, that changes. A flat €3 duty applies per item, charged at the tariff/HTS heading level.
That last part matters. If a single parcel contains three distinct product types, you're looking at three separate €3 charges, not one. The duty stacks by item type, not by parcel.
This applies to non-EU merchants selling via IOSS or selling low-value goods into the EU. If you're registered for IOSS (and given that IOSS covers 93% of EU e-commerce flows, there's a good chance you are), this is your problem to solve.
Why the EU is doing this
The headline reason from the EU Council is competitive fairness. EU-based sellers have been paying duties on domestically produced and imported goods for years, while non-EU sellers shipping directly to consumers have effectively had duty-free access to the market. The €3 flat rate levels that playing field, at least partially.
This is a transitional measure, not the final word
The €3 rate runs from July 2026 through July 2028. It's a bridging mechanism while the EU builds out its Customs Data Hub, which is expected to go live around 2028. Once operational, the permanent regime will apply standard tariff rates to all sub-€150 goods. The flat €3 is the interim fix while the infrastructure catches up.
There's also a separate €2 customs handling fee under discussion as part of the broader EU customs reform package. This is intended to cover the operational cost of processing the volume of parcels entering the EU. It's not yet in force, but it's worth tracking.
What you need to do now
A few things need updating before 1 July:
- Pricing: The €3 duty is non-refundable. It's a cost of clearing goods through an EU member state under your IOSS number. Factor it into your unit economics now, not after the first wave of clearances lands.
- Checkout flows: If the duty is being collected at checkout rather than on delivery, your checkout needs to calculate it accurately. A parcel with mixed product types will attract multiple charges.
- Returns policies: Duties paid on import are not recoverable on returns. Your returns policy needs to reflect the real cost of reversals.
- Customer communication: Buyers have become accustomed to clean checkout prices and no surprises at the door. If your model means duty is collected at delivery rather than checkout, that creates friction. Be upfront about it.
The bottom line
The €150 exemption had a good run. It's gone. The €3 flat duty is not a huge number in isolation, but it compounds quickly on multi-item orders with diverse product types, and it adds up across high-volume sellers. Get ahead of it now, before your first clearances hit in July.
Need help reviewing your IOSS setup ahead of the change? Talk to the team.