On 12 December 2025, the Council of the European Union reached a landmark agreement to introduce a fixed €3 customs duty on all small parcels valued under €150. Effective 1 July 2026, this measure signals the end of the traditional duty-free era and cements the Import One-Stop Shop (IOSS) as the mandatory standard for professional e-commerce.
Timeline of the Overhaul:
- 1 July 2026: Introduction of the fixed €3 flat-rate duty for small parcels.
- November 2026: Proposed introduction of a Union-wide “Handling Fee.”
- March 2028: Total abolition of the €150 duty exemption threshold and launch of the EU Customs Data Hub.
IOSS: The “Green Lane” for the New €3 Duty
Regulators have confirmed that from 1 July 2026, the new €3 customs duty will be seamlessly integrated specifically via the IOSS system. This effectively splits the market into two lanes:
You collect the €3 duty plus VAT at checkout. The parcel clears customs instantly. Your customer pays nothing at the door, ensuring a premium delivery experience.
Parcels face higher scrutiny and delays. Crucially, carriers will likely charge your customers separate “handling fees” at delivery, which often far exceed the €3 duty.
Simplified Duty Buckets: Less Red Tape
To prepare for the 2028 full reform, the EU is moving toward a “Duty Bucket” system. Instead of navigating thousands of complex commodity codes, B2C sales will be grouped into broad categories with fixed rates (0%, 5%, 8%, 12%, and 17%).
This simplification is a massive win for automated compliance. It allows merchants to calculate total “landed costs” (VAT + Duty) at the point of sale with 100% certainty, removing the guesswork that has plagued cross-border trade for decades.
Security & Fraud Prevention (ViDA)
A driving force behind these changes is the fight against “IOSS number masquerading”—where bad actors use stolen IOSS identities to evade tax. The upcoming VAT in the Digital Age (ViDA) package introduces secure digital keys for IOSS identities, ensuring that compliant merchants gain the fastest entry.
What This Means for Merchants
The era of duty-free shipping is ending. To succeed in the European market from 2026 onwards, predictability is your greatest asset. By automating your IOSS compliance with EAS, you future-proof your business against the 2026 duty levy and the 2028 threshold abolition.
