What Is the EU's €150 Low-Value Import Exemption?
For over 35 years, the EU exempted imported goods valued at €150 or below from import duty. Since 2021, VAT on such goods has been collected via the IOSS (Import One-Stop Shop) system, meaning the platform charges VAT at checkout and no additional tax is due at customs.
This threshold enabled explosive growth in cross-border parcel volume: the EU received an estimated 4.6 billion parcels in 2024 (91% from China), rising to 5.8 billion in 2025 (97% from China).
Policy Timeline
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20211 July 2021IOSS launched, €22 VAT exemption removed
The EU launched the IOSS system and removed the previous €22 VAT-exemption threshold, but kept the €150 duty-free threshold in place.
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Mar1 March 2026France launches its own €2-per-parcel tax
France unilaterally introduced a €2-per-parcel tax targeting low-value cross-border e-commerce platforms such as Shein, Temu and AliExpress.
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Jul1 July 2026EU-wide reform takes effect; France pauses its own tax the same day
The 35-year €150 duty-free exemption is formally abolished EU-wide. A transition period begins, applying a flat €3-per-category transitional tariff. On the very same day, France announced a "strategic pause" of its own €2 tax.
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NovNovember 2026 (estimated)Additional EU-wide handling fee expected
An additional EU-wide handling fee of roughly €2 per parcel is expected to be introduced, bringing the total tax burden on a typical parcel to an estimated €5–€8+.
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20281 July 2028Transition period ends; standard HS-code rates apply
The flat €3-per-category transitional tariff is abolished. Imports switch to standard duty rates based on HS code.
Case Study: France's €2 Parcel Tax and Its "Strategic Pause"
France was the first EU member state to act unilaterally, launching its €2-per-parcel tax on 1 March 2026 to target platforms like Shein, Temu and AliExpress. The policy ran into serious trouble within months.
What the Data Showed
- Declared parcel volume through France dropped by roughly 90% (daily volume fell from about 500,000 to 50,000)
- Monthly tax revenue reached only €2.3 million, far short of the projected €400 million annual target
- An estimated 500–1,000 logistics jobs were put at risk
- Freight flights were rerouted to airports in neighbouring countries
Why It Failed
Platforms simply rerouted: parcels were air-freighted into Belgium or the Netherlands, then trucked into France. The cost of transshipping through Belgium was under €0.10 per item — far cheaper than paying France's €2 tax, creating an obvious arbitrage opportunity that undermined the entire policy.
Case Study: Italy's €2 Administrative Fee, Delayed Three Times
Italy planned its own €2 administrative fee on low-value imports, but has pushed back the start date three separate times.
| Delay | Original Date | New Date | Stated Reason |
|---|---|---|---|
| 1st delay | 1 January 2026 | 1 July 2026 | Customs system not ready |
| 2nd delay | 1 July 2026 | Paused, target 30 June 2026* | Additional system adjustment time needed |
| 3rd delay | 1 July 2026 | 1 October 2026 | Avoid double-taxation stacking with the EU's new €3 tariff |
*Dates reflect Italy's own shifting internal timeline as officially communicated at each stage.
Some Italian media have even suggested the national fee "may never truly take effect," since the EU-wide handling fee expected from November 2026 could make individual national surtaxes largely redundant. Still, the long-term direction toward higher overall costs is considered inevitable — and as of 1 October 2026, Italy's €2 fee is set to formally stack on top of the EU tariff.
How the New Tax Is Calculated
During the transition period (1 July 2026 – 1 July 2028), the EU applies a flat €3 tariff per distinct product category in a parcel — not per item.
Transitional Tariff by Category Count
| Categories in Parcel | Tariff | Example |
|---|---|---|
| 1 category | €3 | 3 identical T-shirts (same style) |
| 2 categories | €6 | 1 T-shirt + 1 phone case |
| 3+ categories | €9+ | Clothing + accessories + home goods |
Full Cost Estimate from November 2026 (with Handling Fee)
| Scenario | Declared Value | Transitional Tariff | Handling Fee | Total Extra Cost |
|---|---|---|---|---|
| Clothing (single category) | €20 | €3 | €2 | €5 |
| Clothing + accessories (2 categories) | €35 | €6 | €2 | €8 |
| Clothing + accessories + home goods (3 categories) | €50 | €9 | €2 | €11 |
| Electronics accessories (single category) | €30 | €3 | €2 | €5 |
* From 1 July 2028, the flat transitional tariff is abolished and standard HS-code-based rates apply — roughly 12% for clothing and 0–14% for electronics, per the EU TARIC database.
How Sellers Should Respond
1. Recalculate Costs and Reprice
Factor the €3-per-category tariff (plus the ~€2 handling fee expected from November 2026) directly into your cost structure. For items priced €15–€30, this tax can represent 15–30% of the item's value — a significant margin impact that must be reflected in pricing.
2. Optimize Shipping Strategy
In the short term, split mixed-category orders into single-category parcels to minimize the per-parcel tariff. Longer term, evaluate EU local warehousing — Shein has already shifted 60% of its EU orders to local warehouses, and Temu is targeting 80% EU warehouse coverage by the end of 2026.
3. Ensure Compliant HS-Code Declaration
Accurate, honest HS-code classification is essential to avoid the legal and financial risk of misclassification or under-declaration, which carries much higher long-term cost than compliant declaration.
✅ Do
- Recalculate landed cost and reprice accordingly
- Split mixed-category parcels by category where practical
- Evaluate EU local warehousing for the medium-to-long term
- Confirm your carrier supports EU-compliant declaration
- Monitor the details of the November 2026 EU handling fee
⚠️ Don't
- Mistake France's pause or Italy's delay for policy cancellation
- Keep mixing categories in one parcel without adjusting
- Under-declare value to evade the tariff — high legal risk
- Wait until 2028 to start preparing
- Ignore the stacking effect of the upcoming handling fee
JunFeng UK & Europe Line
JunFeng's Europe-bound shipping lines support accurate HS-code declaration and transparent tax estimates, with a dedicated clearance team tracking the latest EU customs status so you can plan and price with confidence.
Frequently Asked Questions
Common questions about the EU's removal of the €150 low-value import exemption
The exemption was formally removed on 1 July 2026, abolishing the duty-free threshold that had existed for over 35 years. A transition period runs from 1 July 2026 to 1 July 2028, during which a flat transitional tariff of €3 per distinct product category applies. From July 2028, standard HS-code-based duty rates take over.
France's €2-per-parcel tax launched on 1 March 2026 but was "strategically paused" on 1 July 2026 after volumes rerouted through Belgium and the Netherlands caused a roughly 90% drop in declared parcel volume. Italy's €2 administrative fee, originally planned for 1 January 2026, has been delayed three times and is now scheduled for 1 October 2026.
The €3 tariff applies per distinct HS subheading category in a parcel — a parcel containing 3 different categories incurs €9, while multiple items of the same category still count as one €3 charge. From November 2026, an additional EU-wide handling fee of roughly €2 per parcel is also expected to apply.
The flat €3-per-category transitional tariff is abolished, and imports switch to standard HS-code-based duty rates — roughly 12% for clothing and 0–14% for electronics, per the EU TARIC database.
Recalculate costs and adjust pricing to account for the new tariff; optimize shipping by splitting parcels by category in the short term and evaluating EU local warehousing longer term; and ensure compliant, accurate HS-code declarations to avoid misclassification risk.
Yes. The UK is separately planning to remove its own £135 duty-free import exemption, with a consultation document published in July 2026 and the change expected to take effect by October 2028. The two reforms are independent but move in the same direction.
