EU customs in 2026: the end of the 150 euro exemption for dropshippers

The EU has agreed to remove the 150 euro customs duty exemption for goods shipped in from outside the EU. From 1 July 2026, every parcel pays a customs duty, even a 12 euro phone case. The replacement is a flat charge per item type in the parcel, not per parcel and not per unit, so a two product order can cost more than you expect.

This guide is for Shopify merchants who ship or plan to ship to EU customers from China, whether direct to the customer or through a fulfillment partner. If half your orders or more go to Germany, France, the Netherlands, or another EU country, the math below applies to you.

What the EU changed

Since 2021, every commercial parcel entering the EU has owed VAT, no matter the value. What is changing now is the customs duty side. Until mid 2026, a parcel worth 150 euros or less pays no customs duty at all, only VAT. From 1 July 2026, that duty free allowance disappears.

In its place, the Council of the EU has agreed on an interim flat duty for low value parcels, set at 3 euros. It applies from 1 July 2026 and runs for a transition period before a longer term, tariff based system takes over. Parliament still has to give final sign off, so treat the July date as the one to plan around and expect the process to close in the months ahead.

The reform sits inside a wider overhaul of how the EU processes cross border parcels, alongside new data requirements for sellers and platforms. For a Shopify store, the part that changes your invoice is the duty. Everything else is paperwork your fulfillment partner or platform should already be handling.

The new per item duty on a sample order

Here is the detail that catches sellers out: the charge applies per item type in the parcel, based on its tariff classification, not per parcel and not per physical unit inside it.

Take a hypothetical candle brand shipping to Germany. One order for three identical lavender candles, all under the same product code, pays one 3 euro duty charge. Add a scented room spray from a different product line to that same box, and the parcel now has two item types. The duty doubles to 6 euros, even though it is still one parcel going to one address.

That distinction decides whether the new rule barely touches your margin or eats a real chunk of it. A single product order absorbs one flat charge. A bundle across categories, like a phone case plus a charging cable plus a screen protector, could carry three separate charges in one box.

Run the numbers on an 18 euro order. A one item parcel adds 3 euros in duty, about 17 percent of the order value. A bundle with items from three different categories adds 9 euros, half the order value before shipping or VAT. The rule rewards a simple, single category parcel and punishes a mixed bundle.

IOSS and VAT, in plain words

The Import One Stop Shop, or IOSS, is the system that lets a non-EU seller collect VAT from the customer at checkout and remit it to the EU in one filing, for orders up to 150 euros. It has applied since 2021, and it is not new.

IOSS covers VAT. It does not cover the new customs duty, and the two show up as separate charges on the same parcel: VAT on the sale, plus the flat duty now that the exemption is gone. The 3 euro rate is tied to IOSS itself. It applies to parcels moving through a seller registered in IOSS for VAT, which is most Shopify stores selling into the EU already. A parcel outside IOSS does not get the flat rate. It clears under the standard tariff for that product instead, which can land higher or lower than 3 euros depending on what you sell.

Whoever imports the goods is responsible for paying the duty, which in most dropshipping setups means the customer unless the fulfillment terms say otherwise. If the charge is collected at checkout as part of the price, the order arrives duty paid and the customer sees no surprise. If it is not, a carrier can bill the customer or the parcel can sit at customs until someone pays. The second outcome is the one that generates support tickets and refund requests.

Which products get more expensive

Two groups feel this the most.

Low priced single items take the biggest percentage hit. A 3 euro duty on a 10 euro item is close to a third of the order value. The same 3 euros on a 60 euro item is about 5 percent, barely visible in the margin.

Multi category bundles take the biggest absolute hit, because the duty stacks by item type. A gift set with a candle, a diffuser, and a tray, each under a different product code, could see the duty triple on one order compared with selling the candle alone.

Products you already sell as accessories or add ons deserve a second look. If a store's average order pairs a core product with a small extra from a different category, that extra carries its own duty line, on top of whatever it adds to the shipping cost.

What to change on your store

1. Decide who pays the duty, and say so at checkout. Building the duty into your landed price keeps the total the customer sees accurate and avoids a bill at the door, the same logic as duty paid shipping already used for the US market.

1. Confirm your IOSS registration, then treat the new duty as a separate line. If you already collect VAT through IOSS, keep doing that, and add the flat duty as its own cost in your landed price calculation instead of folding it into VAT.

1. Look at your bundles by product category, not by SKU count. A three piece bundle inside one category, like three candle scents, likely stays at one duty charge. A three piece bundle across categories likely does not, so rework the mix before July.

1. Re-run your margin on your cheapest EU sellers. A product that clears 40 percent margin today can drop several points once a flat 3 euro duty lands on an 18 euro order. Decide now whether to absorb it, raise the price, or drop the SKU from EU listings.

1. Ask your fulfillment partner how they plan to handle the new duty. Some will fold it into a duty paid shipping line automatically. Others will pass it through and expect you to price for it before the July date arrives.

Common mistakes

The most common mistake is assuming the 150 euro threshold still protects small orders. It does not, from 1 July 2026, no matter how cheap the item.

The second is treating the new duty as a VAT problem and trying to solve it through IOSS. IOSS never covered customs duty, and it still will not after July. The two charges need separate handling.

The third is pricing bundles as if the duty is a fixed cost per order. It is not fixed. It scales with how many different product categories sit in the box, which means a bundle that looked fine in a spreadsheet can carry a hidden multiple of the duty once it ships.

Frequently asked questions

Does the 150 euro exemption still apply to small orders in 2026?

No, not after 1 July 2026. The 150 euro threshold only ever covered customs duty, and that exemption is being removed for every value of parcel from that date, replaced by the flat interim duty.

What counts as one item under the new EU duty?

An item is a distinct product type in the parcel, identified by its tariff classification, not a physical unit. Three of the same product in one parcel count as one item. Two different products, even in the same order, count as two.

Do I still need IOSS if I am already paying the new customs duty?

Yes, and it matters more now. IOSS handles VAT collection on orders up to 150 euros, and the flat 3 euro duty applies specifically to parcels moving through an IOSS registered seller. Drop out of IOSS and the flat rate goes with it, along with the simpler VAT filing.

Will EU customers see this charge at checkout or get billed later?

That depends on how the order ships. A duty paid shipping setup folds the charge into the price the customer sees at checkout. Without it, a carrier can bill the customer directly or hold the parcel at customs, which is the outcome worth avoiding.

Is the 3 euro figure final?

The Council of the EU has agreed the 3 euro figure and the July 2026 start date, but Parliament still has to give final sign off as of this writing. Confirm the exact figure with your fulfillment partner closer to July.

Run your EU orders through a landed cost check before July, one product at a time, rather than guessing at the impact from a spreadsheet estimate. Our landed cost and margin calculator adds the duty scenario into the total so you can see the real number per SKU, and you can compare it against how the end of the US de minimis exemption already changed the American side of your business.