The end of the EU de minimis era: how ecommerce merchants and 3PLs can prepare 

Originally posted November 19th, Updated on December 12th.

Summary:

The European Union is eliminating its €150 customs duty exemption on low-value imports. This shift will affect landed costs, compliance, and shipping strategies for high-volume ecommerce brands and 3PL operators. Here is what to know, based on the latest guidance from the European Council, European Parliament, and European Commission. 

Introduction 

The European Union has confirmed a major change to how low-value ecommerce parcels will be treated at the border. The long-standing €150 EU de minimis threshold is being abolished, which means customs duties will now apply to many small packages that previously entered the EU without duty. The Council of the European Union reached a political agreement on November 13, 2025 to remove the exemption as part of a larger customs reform aimed at managing the rising volume of small parcels entering the EU as announced in the Council’s press release. For brands, retailers and 3PLs that rely on consistent cross border flows, this is a structural change that requires immediate planning. 

The removal of the duty threshold is part of the EU’s response to unprecedented increases in low-value ecommerce shipments, concerns around undervaluation, and pressure to create a fairer competitive environment for EU retailers. The European Parliament has signaled strong support for closing loopholes and strengthening oversight of ecommerce imports. The EU customs reform process, which began in 2023, set the foundation for this shift by proposing a unified Customs Data Hub and new risk-based approaches to parcel screening. These policy updates highlight a clear direction: low-value imports will face greater scrutiny and a full duty burden. 

What the de minimis rule was and why it is ending 

For years, parcels valued under €150 entered the EU without being charged customs duty, although VAT still applied from the first euro. This exemption enabled merchants and platforms to ship high volumes of low-value goods with relatively low friction. It also supported a booming postal and small-parcel ecosystem. However, the rule created opportunities for systematic undervaluation, and several EU institutions concluded that the model had become unsustainable as ecommerce volumes grew sharply. 

The Council has stated that the volume of low-value imports now strains customs authorities, and that a uniform duty rule is needed to reduce fraud and increase fairness for EU-based sellers. Ending the EU de minimis threshold is therefore a foundational piece of the new customs framework. 

UK also moves to eliminate its £135 De Minimis relief – Reinforcing a global shift

In addition to the European Union’s planned elimination of the €150 duty exemption for low-value imports, the United Kingdom has formally signaled that it will remove its own £135 customs duty relief for low-value imports as part of the Autumn Budget 2025. The UK Government’s official policy document confirms that the current relief which allows goods valued at £135 or less to enter the UK without customs duty will be abolished by March 2029 at the latest.

This de minimis change is part of a broader effort from HM Treasury to address the rapid growth of low-value parcel imports, ensure a fairer competitive environment for domestic retailers, and secure revenues that the government estimates could be significant once the relief is phased out.

While the UK will maintain the £135 relief through at least December 31, 2026, the government has launched a public consultation to seek input on how best to implement the new customs arrangements once the relief ends. The consultation invites feedback on proposed approaches for declarations, reporting, and other procedural aspects that will affect carriers, importers, and platforms.

Because the UK consultation is ongoing and does not yet set final operational rules, this remains a policy direction and framework rather than fully detailed legislation. However, its alignment with similar de minimis reforms in the EU (and other major markets) underscores a global trend toward reducing or eliminating low-value import exemptions that merchants and logistics partners must monitor.

Key dates merchants and 3PLs need to track 

The timeline for the end of the de minimis exemption is linked across several EU actions. The following dates reflect the most authoritative public guidance available from the Council, Parliament, and Commission: 

• May 17, 2023: The European Commission proposes a large-scale customs reform that introduces the EU Customs Data Hub and outlines the eventual removal of low-value exemptions. 
• July 9, 2025: The European Parliament underscores the need to target low-value imports and prevent abuse of the €150 threshold. 
• November 13, 2025: The Council reaches political agreement to abolish the €150 exemption, signaling transitional measures beginning in 2026 and full integration through the Customs Data Hub around 2028. 
• 2026: A temporary solution is expected to take effect. Duties will begin applying to low-value parcels during this transitional period. 
• 2028 (expected): Full implementation via the EU Customs Data Hub, at which point the exemption is eliminated legislatively and operationally across all member states. 
• Industry timelines may shift as individual member states refine implementation. However, the political foundation is already in place, and cross border brands must prepare for operational changes beginning in 2026. 
• March 2029- The UK’s planned removal of the £135 duty exemption

What the new rules mean for landed cost, compliance, and shipping strategy 

The elimination of the EU de minimis threshold changes the cost structure of small-parcel ecommerce. Once duties are charged from the first euro, many items that previously entered the EU with minimal cost will see increases in landed cost. Merchants will need to reevaluate margins for low-value categories and identify SKUs that may no longer be viable under a uniform duty system. This shift may also alter competitive dynamics for platform-based or marketplace sellers who relied on low-value imports to keep retail prices suppressed. 

Compliance requirements will also rise. Customs authorities will depend heavily on accurate product classification, correct HS codes, and verifiable declared values to enforce the new model. The Parliament has specifically called out the role of ecommerce platforms in preventing undervaluation and ensuring accurate data transmission. Merchants with inconsistent classification practices or manual documentation workflows face higher risk of inspections, penalties, and clearance delays. 

The shift will influence how merchants and 3PLs select carriers and networks. As seen after the U.S. de minimis removal, postal networks will lose some of their cost advantage and that parcel networks may become more reliable for duty-included flows. Merchants should evaluate provider capabilities around duty calculation, data accuracy, and delivery duty paid (DDP) versus deliver duty unpaid (DDU) handling. Brands that under-invest in compliance support could see higher abandonment rates at checkout once consumers face unpredictable duties. 

Processing fees 

In addition to duties, the Commission is also evaluating the introduction of a non-discriminatory handling or processing fee on ecommerce imports delivered directly to consumers. The customs reform document indicates that EU institutions are considering this fee to help offset the cost of supervising the enormous volume of low-value parcels entering the EU. External policy analysis suggests the fee is likely to be approximately €2 per parcel, although early-stage discussions have outlined a lower tier around €0.50 depending on customs workload and risk factors. If adopted, this fee would apply uniformly across carriers and would further raise the landed cost on low-value shipments. 

The broader implications mirror the end of the U.S. $800 de minimis rule: a predictable, transparent landed –cost experience becomes essential when exemptions disappear. The EU shift is different in scale, but many consumer-impact patterns will be similar. 

Impact on VAT and IOSS 

The end of the EU de minimis exemption will not change the EU’s core VAT rules, but it will significantly increase the importance of accurate VAT reporting and IOSS (Import One-Stop Shop) usage. VAT already applies from the first euro for all B2C imports into the EU, and the European Commission has emphasized that VAT collection through IOSS will remain a central tool for managing high volumes of ecommerce shipments.  Once duties are applied to all low-value parcels, customs authorities will rely even more heavily on accurate VAT declarations, proper IOSS registration, and consistent data transmission from merchants and platforms.  

IOSS will continue to simplify VAT remittance for qualifying B2C shipments under €150, but the removal of the duty exemption means merchants must ensure that product classification, declared values, and VAT and duty calculations align across systems. If values are inconsistent, shipments may be rejected or flagged for manual clearance. This places greater pressure on merchants and 3PLs to maintain clean data pipelines and ensure that their checkout, tax, and customs systems are fully synchronized. 

What merchants and 3PLs should be doing now 

The brands and logistics providers that adapt early will protect margins and customer experience. The following preparation steps support a stronger transition: 

1. Audit low-value parcel flows to understand exposure and identify SKUs that will be most affected. 
2. Model new landed-cost scenarios using the assumption that duty applies to all parcels, not only higher-value thresholds. 
3. Review carrier strategy, especially for postal lanes that may experience slower clearance or higher refusal rates. 
4. Strengthen HS classification workflows to ensure accuracy under increased scrutiny. Invest in AI driven HS classification for heightened accuracy and applications.  
5. Prepare checkout systems to provide duty-inclusive pricing that reflects the new rules. Consider implementing localized market pricing to improve overall conversion. 
6. Monitor EU implementation updates in 2026 and 2028, as transitional measures could vary by member state. 

These adjustments help merchants avoid clearance delays, prevent customer dissatisfaction from surprise duty charges, and maintain competitiveness in a tighter regulatory environment. 

Risks and opportunities 

The main risks include margin compression, rising fulfillment costs, consumer frustration from unexpected duty payments, and delays linked to inaccurate documentation. However, there are strategic opportunities. A level competitive field for EU-based retailers may open new partnership models. Merchants that proactively strengthen compliance and shift to more predictable DDP workflows can differentiate on transparency and customer experience. 3PLs that invest early in landed-cost automation and classification accuracy can position themselves as premium partners for global brands navigating the transition. 

The end of de minimis in any region tends to reward merchants who embrace full landed-cost visibility and network diversification. The EU shift is another example of how ecommerce logistics is moving toward more robust regulatory frameworks rather than fewer restrictions. 

Conclusion 

The removal of the €150 EU de minimis threshold is one of the most consequential regulatory shifts for global ecommerce entering 2026. Based on the Council’s formal agreement to abolish the threshold, merchants and 3PLs must begin preparing now. The change affects landed cost, compliance, and fulfillment strategy. It also signals the EU’s intent to modernize and centralize customs processes through the Customs Data Hub, which will reshape how data is shared and analyzed across all parcels entering the market. 

Companies that act early will be best positioned to maintain conversion rates, protect margins, and offer a predictable customer experience. If you would like to assess your EU landed– cost exposure or benchmark your cross border readiness for the upcoming changes, the FlavorCloud team can help you plan next steps.