The finance ministers of the European Union have reached an agreement to eliminate the customs duty exemption that is currently enjoyed by packages valued at less than €150 sent from outside the EU. This decision is not new; rather, it is a proposal that has been under consideration for some time, under the premise of ensuring safe and sustainable eCommerce practices.
The European Union Council’s roadmap stipulates that the new regulation will come into force in 2028, however, the institution has announced that it is working on a provisional solution that will allow customs duties to be applied to these goods as early as 2026.
Stephanie Lose, Minister of Economic Affairs of Denmark, announced: “I am extremely pleased that we have reached an agreement to remove the €150 customs threshold. We are ensuring that duties are paid from the very first euro, creating a level playing field for European businesses and limiting the massive influx of low-cost products. In addition, we have agreed on the need to work on a provisional solution as soon as possible, in 2026.”
In its statement, the Council of the European Union asserts that up to 65% of small packages entering the EU from abroad are declared at a value below their actual worth in order to benefit from the current exemption from customs duties. Additionally, according to data from the European Commission, in 2024 there were 4.6 billion shipments of products with a value under €150 entering the European market (around 12 million packages per day).
The European Union considers that these excessive figures generate two major issues. Firstly, the massive influx of low-cost non-EU packages has a significant environmental impact, since foreign companies split shipments into individual packages to avoid paying duties. Secondly, this model also affects market competition, undermining the position of EU-based companies.
Eliminating the customs duty threshold will ensure that appropriate duties are levied on all non-EU goods entering the EU, “thereby harmonizing the system with the current Value Added Tax (VAT) regulations on imports,” according to the Council of the EU.
To achieve this, the Council and the European Parliament are addressing and negotiating the development of a central EU customs data platform that will allow interaction with customs and strengthen controls. “Its functionalities, which will allow authorities to calculate and notify customs debts per item, will enable customs authorities throughout the EU to apply the full customs regime to small packages entering the EU.”
Once this platform is operational, which is expected to be by 2028, the new regulation will be implemented. However, the Council believes it is necessary to start tackling the problem as soon as possible and is therefore committed to working on a temporary solution that could begin to be applied in 2026.
Although the removal of this customs exemption will apply to all goods originating from outside the EU, it can certainly be said that the primary party affected is China. According to data from the Commission, in 2024, 91% of all eCommerce shipments valued below €150 originated from China.
This means that Chinese eCommerce giants such as Shein, Temu and AliExpress will take a significant hit impacting one of their main appeals: ultra-low prices. These companies have benefited from customs regulations that exempt low-cost goods, splitting large orders into multiple small packages and thereby selling items at very low prices.
The new EU regulation will affect the strategy of these companies, which will have to bear the customs costs themselves or include these fees in the price of their products, thereby increasing prices. This could also affect their shipping model, as the strategy of splitting orders will no longer be as effective. On the other hand, the playing field will be more level, since these companies will be obliged to undergo more stringent customs checks, which EU businesses must already comply with.
Photo: Depositphotos
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