European Council Approves New Customs Duty Rules For Small Parcels.

Brussels; February 2026: The European Council on 11th February 2026, has formally approved new customs duty rules for items contained in small parcels entering the European Union, largely via e-commerce. The new rules respond to the fact that such parcels currently enter the EU ‘duty-free’, leading to unfair competition for EU sellers.

Makis Keravnos, Minister of Finance of the Republic of Cyprus has asserted, “As global e-commerce booms, EU customs rules must keep pace. Abolishing the out-of-date exemption for small parcels will help support EU business and shut down avenues for unscrupulous sellers. Now, we need to move forward decisively on the overall customs reform which is a key part of the puzzle in making the EU more competitive and more secure”.

The agreement abolishes the threshold-based customs duty relief for parcels valued at under €150 entering the EU. Customs tariffs will therefore start applying to all goods entering the EU once the EU customs data hub, under discussion as part of a broader fundamental reform of the customs framework is operational. This is currently expected in 2028.  

Until that time, EU member states have agreed to introduce an interim flat rate customs duty of €3 on items contained in small parcels valued at less than €150 sent directly to consumers in the EU. As of 01st July 2026, the duty will be levied on each different category of item, identified by their tariff sub-headings, contained in a parcel.

The rate will be applied to all goods entering the EU for which non-EU sellers are registered in the EU’s import one-stop shop (IOSS) for value-added tax purposes. This encompasses 93% of all e-commerce flows to the EU.

The measure is distinct from the proposed so-called ‘handling fee’ which is currently under discussion in the context of the customs reform package and the multiannual financial framework.

[Example:

A parcel contains 1 blouse made of silk and 2 blouses made of wool; therefore, due to their different tariff sub-headings, the parcel contains two distinct items and €6 in customs duty should be paid].

The new system will have a positive impact both for the EU budget as well as for national public finances, as customs duties constitute a traditional own resource of the Union, and member states retain part of those amounts by way of collection costs. The measure is distinct from the proposed so-called ‘handling fee’ currently under discussion in the context of the customs reform package.

The interim flat rate customs duty of €3 will be levied on each item category contained in a small parcel entering the EU from 1 July 2026 to 1 July 2028 and may be extended as appropriate. Once the new EU customs data hub is operational, this interim duty will be replaced by normal customs tariffs.

According to the European Commission, the volume of small packages arriving into the EU has doubled every year since 2022. In 2024, 4.6 billion such packages entered the EU market. 91% of small shipments arrive from China.

More broadly, the EU is currently working to reform its customs system so that it can deal with the significant pressure arising from increased trade flows, fragmented national systems, the rapid rise of e-commerce and shifting geopolitical realities. Negotiations between the Council and the European Parliament on the reform, including on the establishment of the customs data hub, overseen by a new EU customs authority, are ongoing.

Team Maverick.