EU ends duty-free entry for cheap parcels, charging €3 per item

The era of duty-free ultra-cheap parcels from China is over in the European Union. Since 1 July, every low-value consignment bought online from outside the bloc has been subject to customs duty for the first time, after the EU abolished the long-standing exemption for goods worth €150 or less — the loophole on which Temu, Shein and AliExpress built their direct-from-factory business model in Europe.

In its place, an interim flat duty of €3 now applies to each distinct category of item contained in a sub-€150 parcel sent directly to an EU consumer. The measure, formally adopted by the Council of the EU on 11 February as Council Regulation (EU) 2026/382 and fleshed out in Commission implementing rules published on 8 June, will run until 1 July 2028, when the bloc's new Customs Data Hub is expected to allow normal tariffs to be charged on all goods regardless of value.

How the €3 charge works

The duty is levied per item category, identified by tariff sub-heading, not per parcel. The Council's own example: a package containing one silk blouse and two wool blouses counts as two distinct items — two different tariff sub-headings — and owes €6. A single order spread across several parcels generates charges on each one.

Crucially for shoppers, the charge is owed by the declarant — in practice the seller or platform registered in the EU's import one-stop shop (IOSS) for VAT, or its representative — rather than being collected at the letterbox. According to the Council, the IOSS system covers 93% of e-commerce flows into the EU, so for the big platforms the duty should surface as a slightly higher checkout price, not a surprise fee at delivery. The European Commission says it will regularly assess whether to extend the levy to sellers outside the IOSS.

The scale of the trade being brought into the customs net is vast. According to the Commission, 4.6 billion parcels valued under €150 entered the EU in 2024 — roughly 12 million a day — with 91% arriving from China, and volumes doubling every year since 2022. The Commission also estimates that up to 65% of small parcels entering the EU were undervalued to dodge duties.

Why Brussels moved early

Full abolition of the threshold was agreed in November 2025 as part of the EU's broader customs reform, but the permanent regime depends on the Customs Data Hub, not expected before mid-2028. Rather than wait, member states opted for the simple flat fee as a stopgap, citing unfair competition for European retailers, unsafe products slipping through controls and the environmental cost of billions of individually shipped packages.

As global e-commerce booms, EU customs rules must keep pace. Abolishing the out-of-date exemption for small parcels will help support EU business and shut down avenues for unscrupulous sellers, said Makis Keravnos, Cyprus's finance minister, speaking for the Council presidency when the regulation was adopted in February.

Denmark's economy minister Stephanie Lose, who chaired the November 2025 agreement, said the change ensures that duties are paid from the first euro, creating a level playing field for European businesses and limiting the influx of low-cost goods.

The platforms saw the change coming. Shein and Temu spent months shifting bulk inventory into EU-based fulfilment centres so that orders can be dispatched domestically — bulk imports pay duty on entry, after which individual deliveries face no per-parcel charge. Retail groups, meanwhile, argue the measure is too soft: Belgium's small-business federation SNI has called the parallel handling-fee plan «completely insufficient» to shield European shops from the flood of cheap imports.

What changes for shoppers in Luxembourg

For consumers in Luxembourg and the Greater Region, the practical effects are real but mostly indirect:

• Prices, not paperwork: orders from IOSS-registered platforms such as Temu, Shein and AliExpress should simply cost slightly more at checkout — €3 per item type — with no new formalities at delivery.
• VAT is unchanged: import VAT has been due on all non-EU parcels since 2021 and is already collected at checkout by IOSS sellers, as Luxembourg's customs administration notes.
• Non-IOSS shipments remain the costly route: every non-EU import requires an electronic customs declaration, and when POST Luxembourg or a courier clears a parcel on the recipient's behalf, its customs-clearance fees come on top of any tax due — unchanged by the new regime.
• More charges may follow: a separate customs handling fee of around €2 per parcel, meant to compensate customs authorities for processing the e-commerce flood, is still being negotiated as part of the wider reform package.

A two-year bridge to full tariffs

The €3 duty is explicitly temporary. From 1 July 2028, under the customs reform agreed in outline in November 2025, ordinary EU tariff rates are due to apply to every imported item from the first euro of value, calculated through the new data hub. Product identifiers on low-value consignments, voluntary since 1 July, become mandatory on 1 November 2026 to help customs authorities spot unsafe or misdeclared goods.

Customs duties flow to the EU budget as a traditional own resource, with member states keeping a share to cover collection costs — meaning the billions of small parcels that once crossed the border untaxed will now, item by item, help fund the union that is inspecting them.