European Union Customs Reform: Removal of the €150 Duty Exemption

The European Union is preparing for one of the biggest overhauls of its customs system in decades.

As part of the EU Customs Reform, the long-standing €150 customs duty exemption for low-value goods imported from non-EU countries will be removed. This major change will significantly impact e-commerce imports, online retailers, and businesses trading with the European Union.

The goal of the removal of the duty exemption is that all goods entering the EU via e-commerce channels will be subject to customs duties - regardless of their value. 

  • The €150 duty-free threshold for low-value imports will be abolished.
  • Every parcel shipped to EU customers will attract customs duties, VAT, and require a customs declaration.
  • Online marketplaces and sellers will need to adjust their processes to remain compliant with the new EU import rules.

This shift marks one of the most impactful updates for cross-border e-commerce in recent years.

Why Is the EU Changing Its Customs Rules?

The European Commission has stated that the current €150 exemption is outdated and no longer suitable for today’s high-volume e-commerce environment. 

The  EU customs reform aims to:

Create Fair Competition
The exemption has enabled some non-EU sellers to under-declare goods or avoid duties, putting EU-based retailers at a disadvantage.

Modernise Customs Processes
By applying duties to all goods, the EU aims to streamline the system, improve traceability, and support the development of a more digital, centralised EU Customs Data Hub.

Reduce Fraud and Misclassification
A uniform duty system eliminates loopholes that allowed abuse through false low-value declarations.

EU Customs Reform Timeline

Early 2026 – Transitional Duty Calculation System
A temporary method for calculating customs duties will be introduced to simplify implementation for retailers and customs authorities.

November 2026 – New E-Commerce Handling Fee
A specific handling fee for e-commerce parcels entering the EU will come into effect.

Mid-2028 – Full Implementation of the EU Customs Data Hub

By 2028, the EU aims to have its centralised Customs Data Hub and new EU Customs Agency fully operational, enabling a more efficient, data-driven customs environment.

Impact on Businesses Shipping to the EU

The reform presents several challenges—and opportunities—for e-commerce sellers exporting to the EU.
1. Increased Costs
All shipments into the EU will incur customs duties, regardless of value. This will raise the cost of fulfilling EU orders and may affect sales volumes.
2. Higher Compliance Burden
Businesses must prepare for:
3. Potential Delivery Delays
During the transition period, customs processing times may increase. UK businesses should communicate expected changes and possible delays clearly to EU customers.
4. Stronger Competition From EU-Based Sellers

With duties applying to all non-EU imports, EU-based retailers gain a pricing advantage. Companies outside of the EU, which include those in the United Kingdom may need to explore:

  • EU fulfilment centres
  • Local warehousing options
  • New logistics strategies to reduce delivery times and duty exposure

United Kingdom also plans to remove Duty Exemption for low-value imports.

Further to the UK budget announcement last week, the UK government also plans on removing the customs duty exemption for low-value imports  (goods worth £135 or less). This means all parcels entering the UK will be subject to customs duty, in addition to VAT.

Reasons for Change to the customs process in the UK

•    Ensure fair competition for UK retailers.
•    Generate additional revenue (estimated £600m annually).
•    Address rapid growth of low-value imports (53% YoY increase).

UK Customs Timeline 

Public consultation has opened, available now until 6 March 2026. 

Full removal of exemption by March 2029 at the latest.

Whilst UK retailers have welcomed this approach to level the playing field, online consumers can likely expect an impact on prices due to additional customs duties.

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Five steps to consider to mimimise disruption

For overseas sellers, there will be a higher cost for compliance and potentially reduced margins. 
How Businesses Should Prepare Now for the upcoming EU & UK customs changes:

To minimise disruption ahead of the customs changes, companies should:

•    Review product pricing and shipping strategies.
•    Ensure correct commodity codes and customs data accuracy.
•    Assess the potential value of UK or EU-based fulfilment solutions.
•    Update customer communication and checkout information.
•    Invest in customs automation tools where possible.

Need more information on Customs Services into the EU & UK?

In summary, the upcoming Customs Reform marks a major shift in how goods enter the EU & UK, especially for e-commerce businesses. With the elimination of the duty exemption, retailers must adapt quickly to stay competitive in the UK & EU market.

Proactive preparation now will help ensure a smoother transition as the new rules come into force in 2026 and beyond. 

Are you looking for support with your commodity codes and customs data accuracy or need general customs advice? Are you looking into fulfilment centres for European distribution? With fulfilment centres in the United Kingdom, Netherlands and France, don’t hesitate to reach out to the SEKO team!