What changed on 1 July 2026?
The EU's customs duty exemption for consignments worth €150 or less last applied on 30 June 2026. From 1 July 2026, low-value e-commerce parcels pay a temporary flat duty of €3 per item instead. It runs until 1 July 2028, while the EU builds a fuller customs reform.
"Per item" means per tariff line. A tariff line is each different type of product in the parcel, classified under its own customs commodity code. It does not mean per unit.
| Period | VAT on parcels up to €150 | Duty on parcels up to €150 |
|---|---|---|
| Before 1 July 2021 | Exempt up to €22 | Exempt up to €150 |
| 1 July 2021 to 30 June 2026 | Due on every parcel | Exempt up to €150 |
| 1 July 2026 to 1 July 2028 | Due on every parcel | Flat €3 per tariff line |
Since July 2021, VAT on these parcels is paid through IOSS or at the border. The European Commission has published its guidance and legal text for the flat duty.
How is the €3 duty counted?
You pay €3 for each distinct commodity code in the consignment, not for each thing in the box. A commodity code is the customs number that classifies a product. Three different products cost €9 in duty. Three units of the same product cost €3.
Worked example: three different products
Say a customer in France orders a cotton T-shirt, a ceramic mug and a phone case. The total value is €60, sent in one parcel. Each product sits under a different commodity code, so the T-shirt is tariff line 1, the mug is line 2 and the phone case is line 3, one unit each.
Duty3 tariff lines × €3 = €9 customs duty
Worked example: three of the same product
Now say another customer orders three identical cotton T-shirts. The total value is also €60, in one parcel. All 3 units sit on a single tariff line.
Duty1 tariff line × €3 = €3 customs duty
Same value, same parcel, a €6 difference. Mixed baskets cost more in duty than bulk orders of one product.
How does the €3 duty fit with IOSS?
The Import One Stop Shop (IOSS) covers VAT only, so it does not collect the €3 duty. IOSS lets you charge the customer's VAT at checkout on consignments up to €150. The €3 is customs duty, a separate charge that you or your customer must pay.
The VAT side has not changed. Since 1 July 2021, every import into the EU has been liable to VAT, whatever its value. With IOSS, you charge VAT at the customer's country rate and pay it through one monthly return. Without IOSS, the customer pays the VAT when the parcel arrives, usually with a carrier's handling charge on top.
You need to decide who pays the duty:
- You: build it into your price and settle it through your carrier.
- Your customer: they pay it on delivery.
If you use IOSS to give customers a delivery with no surprises, a duty bill at the door undoes that.
The IOSS limit is still €150. Above that, normal customs duty rates and import VAT apply at the border, and you cannot use IOSS. Our guide to EU VAT for UK businesses covers the options for larger orders.
What about the EU handling fee?
The EU has also announced a separate handling fee on low-value parcels, to cover the cost of customs checks. The amount and start date have not been set. Do not quote a figure to customers until it is published. We will update this page when it is.
What should UK sellers change?
Start with your commodity codes, because the duty now depends on them. Then decide who pays the duty, check how your carrier collects it and look at your basket mix. Keep IOSS running for the VAT, and check your origin claims before you rely on them.
- Get your commodity codes right. Every product needs a correct code on the customs data. Wrong or vague codes can mean extra lines, delays or returns.
- Decide who pays the duty. If you sell delivered duty paid, build €3 per tariff line into prices or shipping. If the customer pays, say so clearly at checkout.
- Check your carrier's process. Ask how they collect the €3, whether they bill you or the customer, and what they charge for it.
- Look at your basket mix. Say a €25 order holds three different products. The duty is €9, which is 36% of the order value (€9 ÷ €25).
- Keep IOSS running. It still saves your customers the VAT bill and the handling charge that comes with it.
- Check preferential origin. UK-origin goods can enter the EU duty-free under the UK-EU trade deal with the right origin statement. Read the Commission's guidance on how preference claims work with the flat duty before you assume they still apply.
What to do next
- Find the VAT rate for each destination in our EU VAT rates table, for example the French rate for the worked examples above.
- Read EU VAT for UK businesses for IOSS, OSS and larger orders.
- See what else is coming in our guide to VAT in the Digital Age (ViDA).
- Use our VAT calculator to add or remove VAT at any rate.
General guidance only. Check the Commission's guidance or ask a customs adviser about your own goods.
Questions
Has the EU €150 duty exemption ended?
Yes. From 1 July 2026, low-value e-commerce consignments pay a flat €3 customs duty per item (per tariff line) instead. This applies until 1 July 2028.
Is the €3 charged per parcel or per product?
Per tariff line. Three different products in one parcel cost €9. Three units of the same product cost €3.
Does IOSS cover the €3 duty?
No. IOSS collects VAT only. The €3 is customs duty and is paid separately, by you or your customer, through the carrier or customs process.
Is there a handling fee as well?
The EU has announced one, but the amount and start date have not been set yet.
Do I still need IOSS?
Yes, if you sell to EU consumers in consignments up to €150. IOSS is still the simplest way to deal with the VAT, and the duty change does not affect it.
Figures in this guide come from our rules file, last checked against HMRC on 4 October 2026.
