EU Small-Parcel Duty Guide

Why low-value parcels now face customs scrutiny

For decades, parcels below certain value thresholds entered the EU with minimal customs intervention. The VAT exemption for goods valued under €22 was removed in July 2021, and the EU has since proposed eliminating the €150 customs duty exemption as well. The rationale is straightforward: the volume of low-value cross-border e-commerce parcels has grown so dramatically that the exemptions were creating an uneven playing field for domestic retailers who collect VAT at point of sale.

The practical result is that every parcel entering the EU — regardless of value — requires a customs declaration with an HS code, a declared customs value, and a statement of origin. Even a €3 phone case from China must be classified, valued and taxed.

Current thresholds and rules

• VAT — import VAT applies to all parcels entering the EU, with no minimum threshold. The rate depends on the destination member state and the product type (standard or reduced rate).
• Customs duty — parcels with an intrinsic value at or below €150 are currently exempt from customs duty (but not from VAT). The EU has proposed removing this exemption; when implemented, duty will apply from €0.01.
• HS classification — required on all customs declarations regardless of value. Without a valid HS code, the parcel cannot clear customs.
• IOSS (Import One-Stop Shop) — a mechanism allowing non-EU sellers and marketplaces to collect VAT at point of sale for parcels up to €150, avoiding collection at the border. The buyer sees the full price upfront; the seller remits VAT to a single EU member state.

Who is affected

Sellers outside the EU

Direct-to-consumer sellers shipping from China, the UK, the US or other non-EU countries must either register for IOSS (or use a marketplace that is registered) or accept that their parcels will be stopped at the border for VAT collection. Border collection means delivery delays and a poor customer experience.

Marketplaces

Under EU rules, online marketplaces facilitating the sale of goods valued up to €150 are deemed the seller for VAT purposes. They must collect and remit VAT at the point of sale. This applies to platforms like Amazon, AliExpress, Temu, Shein, and eBay for third-party goods shipped from outside the EU.

Consumers

If the seller or marketplace has not pre-collected VAT via IOSS, the consumer will be asked to pay import VAT (and potentially duty, if the exemption is removed) before the parcel is released. This is typically collected by the postal service or courier, often with an additional handling fee of €5–€15.

Logistics providers and customs brokers

Express carriers and postal services must process customs declarations for millions of additional parcels that previously cleared without intervention. The volume of declarations requiring HS codes, value assessments and duty/VAT calculations has increased by orders of magnitude.

Worked example

Common mistakes to avoid

• Assuming low value means no customs requirement — all parcels need an HS code and customs declaration regardless of value.
• Under-declaring customs value — customs authorities cross-reference declared values with market prices and may reassess or seize goods with suspiciously low declarations.
• Confusing duty exemption with VAT exemption — the VAT exemption was removed in 2021; the duty exemption at €150 still exists (for now) but is separate from VAT.
• Not factoring in carrier handling fees — postal services and couriers charge €5–€15 per parcel for customs processing when VAT is not pre-paid via IOSS.
• Ignoring HS code accuracy — even for low-value parcels, an incorrect HS code can trigger customs holds, delays, or duty reassessments.

How the calculators help

The HS Code Duty Calculator lets you estimate the duty and VAT on any parcel by entering the HS code, customs value and applicable rates. The Landed Cost Calculator adds freight and handling to give you the true total cost. The Import Duty Calculator focuses on the duty arithmetic, and the CBM Calculator helps sellers estimate volume-based freight cost when shipping in bulk to EU fulfilment centres.