EU Customs & VAT Overhaul: What the 2026 Small-Parcel Duty Means for E-Commerce

On 12 December 2025, the Council of the European Union agreed to introduce a fixed €3 customs duty on small parcels valued at less than €150 entering the EU via e-commerce, effective 1 July 2026.

While this introduces a new cost, it also sends a powerful signal: The Import One-Stop Shop (IOSS) is not going anywhere. In fact, the EU is doubling down on IOSS as the standard, “green lane” for entering the European market.

This move addresses the current duty-free treatment of low-value imports—a system that has caused competitive distortions and fraud—while cementing IOSS as the most efficient way to clear customs.

IOSS: The “Green Lane” for the New €3 Duty

From 1 July 2026, the new €3 customs duty will be applied specifically via the IOSS system.

• For IOSS Sellers: You collect the €3 (plus VAT) at checkout. The parcel flows through customs instantly. The customer pays nothing at the door.
• For Non-IOSS Sellers: You risk facing the “old world” of commerce: slower borders, higher scrutiny, and—crucially—carrier handling fees charged to your customer at delivery, which often far exceed €3.

The EU estimates that 93% of e-commerce parcel flows will be captured by this measure. By building the new duty into the IOSS infrastructure, regulators are confirming that IOSS is the primary vehicle for cross-border trade.

A Step Toward the 2028 Full Reform

This €3 levy is a temporary bridge to a much larger transformation.

From March 2028, the current €150 duty exemption threshold will be legally abolished entirely. Customs duties and VAT will apply to all imports regardless of value.

At that stage, the “Deemed Importer” model becomes central, effectively making IOSS compliance mandatory for marketplaces and serious sellers. The message is clear: Early adopters of IOSS are future-proofed; those waiting are just delaying the inevitable.

Simplified Duty Buckets: Less Red Tape

To make this transition smoother, the 2028 reform will replace thousands of complex tariff lines with a simplified “Duty Bucket” system for B2C sales.

Instead of hunting for obscure commodity codes, goods will be grouped into broad categories with fixed duty rates (e.g., 0%, 5%, 8%, 12%, and 17%).

• The Benefit: This makes duty calculation predictable and automatable at checkout—perfect for IOSS users.
• The Result: Simpler compliance for you, and total transparency for your customer.

Fraud Prevention & Security

A key driver for these changes is “IOSS number masquerading” (bad actors using legitimate IOSS numbers to evade tax).

The 2028 reform package (ViDA) introduces strict security measures to link each shipment to a valid IOSS identity. This protects compliant merchants. Your IOSS number will become a secure digital key, ensuring that your reputation grants your parcels faster entry.

What This Means for Merchants

The era of “wild west” duty-free shipping is ending, but the era of streamlined, digital trade is beginning.

• IOSS is the Gold Standard: It is the only way to offer a “landed cost” experience where the €3 duty is prepaid and invisible to the consumer at delivery.
• Predictability is Key: The €3 flat rate (and later the Duty Buckets) removes the guesswork from pricing.
• Prepare for 2026: Ensure your checkout can handle the fixed duty logic by July 1, 2026.

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