Europe is closing a major e-commerce loophole: How the end of duty-free shipping drives up costs for brands

Europe is closing a major e-commerce loophole: How the end of duty-free shipping drives up costs for brands

With over 450 million consumers, the European Union is one of the most attractive international markets for DTC ecommerce brands. And much of that growth has been driven by policies that make it easier to ship low-value goods into the region.

In 2025 alone, more than 5.8 billion low-value ecommerce parcels were shipped into the EU, which shows just how big this channel has become.

But now, a major policy shift is about to change how brands access that opportunity.

In 2026, the EU will begin phasing out a key regulation that has influenced cross-border ecommerce for years. The €150 duty de minimis threshold (which allowed low-value goods to enter duty-free) is going away.

This is a major change for brands that rely on direct-to-consumer shipping into Europe, Passport reports.

The End of Duty-Free Treatment for Low-Value Goods

Beginning on July 1, 2026, the EU will remove the €150 duty de minimis threshold. This means that no matter the order value, all imports into the region could be subject to customs duties.

Even though VAT still applied, up until now, many e-commerce shipments were able to enter the EU without paying any duties. This made it much easier for brands to test market demand, keep pricing competitive, and launch in new markets without taking on too much extra cost.

However, as de minimis is being eliminated, brands will likely see:

• More shipments subject to duty
• Higher landed costs on low-value orders
• Pressure to show full pricing upfront at checkout

A New Flat Duty on Small Imports

The EU is also introducing a temporary flat €3 customs duty per item category for low-value ecommerce imports as part of the transition.

This fee is applied at the product category level based on HS6 classification (not quantity), which can trigger multiple fees if a shipment includes different types of products.

For example:

• One shipment with two t-shirts = a single fee
• One shipment with a t-shirt and a pair of jeans = two separate fees

This new structure adds additional layers of cost and operational complexity, especially for brands shipping bundles or mixed carts.

The €3 duty rule takes effect on July 1, 2026, and applies to imported goods valued under €150. This is part of a broader EU customs overhaul with more reforms expected as they continue to implement a standardized approach to e-commerce imports.

Fees Are Already Rolling Out at the Country Level

Many countries have already introduced new fees for small packages, even before the EU-wide changes take effect.

These include:

• Italy – €2 per parcel starting in July 2026
• Romania – around €5 per parcel (in effect as of January 2026)
• France – €2 per product category (in effect as of March 2026)

Even more countries are expected to follow this trend as the EU moves towards a unified framework later in 2026.

These additional fees are collected even when taxes are prepaid and are charged on top of both VAT and customs duties. In some cases, countries will apply costs based on the point of customs clearance, while others apply them based on the final delivery destination.

The EU has also approved a €2 handling fee per parcel, which is expected to roll out across all member states later in 2026. Over time, this could potentially replace individual country-level fees as early as November 1.

With all these new regulations layered together, the cost structure for low-value ecommerce shipments begins to get much more complex.

What This Means for E-commerce Brands

These changes aren’t simple regulatory updates; they indicate a bigger trend in how DTC shipments will be handled in one of the world’s largest consumer markets.

The impact is already affecting brands:

• Costs are rising – With duties now applying to all shipments, even low-value orders can become less profitable unless you make adjustments to your pricing.
• Checkout expectations are changing – Accurate, upfront pricing is more important than ever, as customers are less willing to deal with surprise fees at delivery.
• Operations are getting more complex – Import location, product classification, and fulfillment models all now play a bigger role in total cost and the delivery experience.
• Compliance is becoming a competitive factor – Brands that can manage duties, taxes, and fees correctly have a clear advantage over those that can’t.

With additional fees and enforcement still rolling out, this isn’t a one-time change; it’s something that will continue to develop.

The Global Shift in E-Commerce Import Rules

The EU isn’t acting alone. Governments around the world are rethinking how low-value imports should be handled for e-commerce.

The United Kingdom, for example, has announced plans to remove its £135 duty threshold by 2029 after a transition period.

Together, these updates point to a push for more consistent duty collection and an effort to level the playing field between domestic and international sellers.

Preparing for a New Era of E-commerce Imports

Europe continues to be one of the most valuable e-commerce markets in the world, but it’s becoming more complicated to access.

The elimination of duty-free treatment for low-value goods is ending the era of simpler cross-border selling into the EU.

What comes next is a more demanding market where cost control, compliance, and operational strategy play a much bigger role in success.

With implementation already underway and more updates expected through 2026, brands have a limited window to prepare.

This prep might include:

• Reassessing pricing and margin strategies to account for new duties and fees
• Improving landed cost visibility at checkout to avoid any surprise charges
• Evaluating fulfillment models and import approaches, including where goods are cleared
• Strengthening compliance processes around classification, documentation, and duty calculation
• Reviewing product assortment and bundling strategies to minimize unnecessary costs

As international trade keeps changing, brands that invest in the right infrastructure and strategy will be in a much better position to manage costs, protect margins, and deliver a consistent customer experience.

This story was produced by Passport and reviewed and distributed by Stacker.