On November 13, 2025, the EU announced that it had reached an agreement on eliminating duty-free treatment for goods valued under €150. The European Council intends to introduce a temporary transitional solution as soon as 2026, and will implement a longer-term solution upon the expected launch of the proposed EU Customs Data Hub in 2028.

What’s Happening?

The EU’s announcement comes just months after the U.S. officially eliminated the de minimis exemption, its own duty-free exemption for low-value goods. Amid rising shipping costs to the U.S., EU lawmakers have raised concerns over potential diversions to Europe, where direct-to-consumer ecommerce shipments have already skyrocketed in recent years.

EU consumers imported approximately 4.6 billion low-value ecommerce shipments in 2024, a figure that has more than tripled since 2022. Chinese ecommerce brands have propelled a large portion of this recent surge, largely made possible by the duty-free threshold for low-value goods. In 2024, 91% of all low-value ecommerce shipments destined for the EU originated from China, with major Chinese marketplaces accruing more than 75 million users in the EU in the span of a few months.

EU lawmakers have raised a number of concerns. The European Council has suggested that the duty-free threshold incentivizes practices that undercut EU businesses, citing estimates that up to 65% of small parcel imports are undervalued to avoid customs duties. The threshold also incentivizes environmentally unsustainable shipping practices, with many non-EU sellers splitting packages into smaller parcels to meet the duty-free threshold. Meanwhile, EU authorities have expressed growing concerns over counterfeit or otherwise non-compliant products purchased online, citing potential safety risks and intellectual property infringement.

Impacts on Ecommerce Brands Importing into the EU

As the end of the €150 duty-free threshold looms ahead, what should businesses keep top of mind?

• Increased costs: Businesses should prepare to face increased costs as soon as next year, upon the expected launch of the EU’s transitional solution.
  • As part of its 2028 Customs Reforms, the European Commission has proposed a simplified tariff regime for low-value goods. However, the specifics of the plan have yet to be determined.
  • Proposed handling fees: Beyond new duties, businesses may also face new handling fees. In May of 2025, the European Commission proposed a €2 handling fee for low-value parcels shipped directly to consumers from outside the bloc, and an alternative fee of €0.50 for parcels first routed to EU warehouses before being shipped to end-consumers. And last month, a number of individual EU member states—including Romania, France, Belgium, and the Netherlands—introduced proposals to levy small customs fees on low-value parcels.
• Procedural changes for value-added tax (VAT): The European Commission has proposed an expanded Import One-Stop Shop (IOSS), a system that streamlines the declaration and payment of VAT on EU goods valued under €150.
  • First introduced in 2021, the IOSS enables sellers to collect VAT at the point of sale, and later remit the revenue to customs authorities in their EU member state. Because VAT is collected upon payment and not at the border, these goods are exempt from import VAT and undergo faster customs clearance.
  • If implemented, the expanded IOSS will apply to all goods, regardless of their value.
• A growing focus on data-driven compliance: The EU intends to launch its proposed Customs Data Hub in 2028. Intended to serve as a centralized digital platform for data exchange and risk management, the EU Customs Data Hub will likely result in stronger enforcement of product requirements, payment provisions, and other compliance measures.
  • In 2024, 92% of all EU imports valued under €150 involved importers registered in the IOSS. The European Commission has proposed that IOSS-registered online marketplaces and sellers act as “deemed importers” upon the launch of the EU Customs Data Hub—or, in other words, serve as the party responsible for collecting applicable duties and VAT, while ensuring that imports entering the customs territory comply with relevant EU requirements. Notably, deemed importers will be required to collect all duties, fees, and compliance-related data at the point of sale, before the goods arrive at the EU border. The deemed importer will also be responsible for remitting revenue and data to their member state’s customs authorities, and for documenting all EU sales in the Customs Data Hub.

Flexport’s trade and advisory experts are here to help businesses navigate upcoming changes and take proactive action. Please reach out to your account manager or advisory@flexport.com for more details.