EU Removal of Customs Duty Relief for Low-Value Consignments

Removal of the Low Value Consignment Relief

From 1 July 2026, the longstanding customs duty exemption for small parcels entering the European Union comes to an end. Online shoppers, eCommerce sellers, and logistics providers need to understand what is changing, what it means in practice, and what comes next.

What Is Changing and Why

Under the current rules, goods arriving in the EU in consignments with an intrinsic value of €150 or less are exempt from customs duty. VAT has applied since 2021 via the IOSS regime, but no customs duty has been charged. This exemption — often referred to as Low Value Consignment Relief (LVCR) or the de minimis threshold — has been a feature of EU customs law for decades.

As of 1 July 2026, goods entering the EU in small consignments valued at less than €150 will be subject to a fixed €3 customs duty. The measure was agreed by the EU Council in December 2025 and formally adopted on 11 February 2026.

The driving rationale is competitive fairness. The EU Council stated that this temporary measure responds to the fact that such parcels currently enter the EU duty-free, leading to unfair competition for EU sellers, health and safety risks for consumers, high levels of fraud, and environmental concerns.

The New €3 Customs Duty: How It Works

The €3 duty applies per item, determined by the item's customs tariff classification (tariff heading). This means a single parcel containing multiple distinct product types will attract multiple €3 charges.

The customs duty of €3 per item applies to packages sent directly to consumers from countries outside the EU, with each distinct product type in a package attracting a separate €3 charge.

Irish Revenue's published examples illustrate how this works in practice: a package containing a notepad, a pen, and a keyring — three distinct items — attracts €9 in customs duty (3 × €3), plus VAT on the total, while a package containing two identical cotton t-shirts — one item type — attracts €3 in customs duty (1 × €3), plus VAT.

The €3 customs charge is included in the total used to calculate VAT. Buyers should therefore expect that the duty itself increases the VAT base.

Who Is Affected

The rate applies to all goods entering the EU for which sellers are registered in the EU's Import One-Stop Shop (IOSS) for VAT purposes, encompassing 93% of all e-commerce flows to the EU.

The European Commission has indicated it will regularly assess whether the scope should be extended to goods arriving via traders not currently covered by IOSS.

The change affects:

• Consumers buying goods online from non-EU countries (including Great Britain), who will see higher costs either at checkout or on delivery.
• eCommerce sellers and marketplaces based outside the EU selling to EU customers, who must update their checkout processes and pricing.
• Logistics providers and carriers responsible for collecting and remitting the duty where it is not collected at point of sale.

How the Duty Is Collected

Consumers will pay the €3 customs duty per item in one of two ways, depending on the terms and conditions of the business they are buying from: charged at checkout, where the duty is shown and included in the final price; or charged on delivery, where the delivery company will require payment before the goods can be delivered.

Sellers and platforms should clearly communicate to buyers which model applies, and buyers are advised to check the website's terms and conditions before completing a purchase.

Returns and Refunds

Customs duty is non-refundable if a buyer decides to return an item, unless the goods are faulty. This is a material change for consumers accustomed to full-cost refunds on returned international purchases, and businesses should update their returns policies and customer communications accordingly.

Is This Permanent?

No — the €3 flat rate is a transitional measure. The measure will stay in place until the agreement for a permanent solution to eliminate the customs duty relief threshold altogether comes into application. At that point, goods valued under €150 will be subject to normal EU customs tariffs based on each product's individual tariff classification, as applies to all higher-value imports today.

The measure applies from 1 July 2026 until July 2028 and represents a significant shift in how the EU treats the vast volume of small parcels flowing into the Single Market. The EU Customs Data Hub, which will underpin the permanent reform, is expected to be operational around 2028.

A separate €2 customs handling fee is also under discussion as part of the broader EU customs reform package, intended to cover the operational costs of processing the high volume of parcels entering the EU. This fee is distinct from the €3 duty and is not yet in force.