The EU and UK are making considerable changes to their customs rules by removing the duty exemption for low-value goods. This is an effort to reduce the volume of low-value imports and prevent businesses from undervaluing goods and wrongly classifying products to avoid paying duties. 

This will have significant impacts on costs and logistics processes that importers will need to prepare for. In this blog, we explore the EU and UK customs changes being made in 2026, the impact this will have on Asia-Europe trade, and how businesses can prepare to stay compliant.

 

What changes are being made to EU customs in 2026?

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 following changes are being made to low-value imports:

  • 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.

  • A flat duty rate of €3 per item will be applied. 

  • 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The European Commission has stated that the current €150 exemption is outdated and no longer suitable for today’s high-volume e-commerce environment. Changing EU customs regulations 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, the undervaluation of parcels, and incorrect use of commodity codes.

 

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.

 

What changes are being made to UK customs in 2026?

Similarly to the changes to EU customs rules, the UK are also reviewing low-value import rules. 

 

UK low-value import changes 

Further to the UK Autumn budget announcement in November 2025, 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.

 

Why is the UK reforming low-value import rules? 

The UK believe changing the customs process will bring a range of benefits, including:

Fair competition for UK retailers

Updating the UK’s low-value import rules aims to ensure UK retailers are not being disadvantaged by the existing customs duty exemption, which sees some non-UK retailers able to under-declare goods and avoid paying duties. 

Generate additional revenue 

The changes to UK customs rules are expected to generate additional revenue, estimated to be around £600m annually. 

Address rapid growth of low-value imports 

In 2025, it was reported that there was a 53% year-on-year increase in low-value imports into the UK. The changes to customs rules aim to reduce the rate at which this is growing. 

 

UK customs reform timeline 

Public consultation ran between 26 November 2025 and 6 March 2026, and has now ended. 

The full removal of the current £135 customs duty de minimis exemption is expected 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.

 

Asia-Europe customs compliance: what importers need to know

The changes being made to UK and EU customs processes will impact importers across the world, particularly Asian imports that make up a large share of low-value parcels to the EU. 

As the customs reforms are, in part, designed to address the rapid increase in small parcel imports from Asia, it is important that shippers understand how they might be affected, how to stay compliant, and what changes are being made to documentation and duty collection.

We have outlined everything Asia-Europe shippers need to know below: 

 

How Asian imports are impacted by customs changes

The EU and UK customs reforms are designed to address high-volume, low-value imports. This will have a particular effect on Asian imports, which make up a large percentage of these low-value shipments. 

These changes will be impactful in two main ways: increased costs and higher levels of scrutiny on parcel declarations. 

Increased costs

Before the reform, goods valued under a certain threshold could enter the UK and the EU without customs duty being applied. After the changes come into effect, importers across Asia will be required to pay duties on all of their low-value shipments.

This will increase costs for importers shipping low-value goods from Asia to the EU or the UK, and will particularly impact dropshipping models, direct ecommerce shipments from Asian manufacturers, and cross-border marketplaces shipping from Asian warehouses.  

Higher scrutiny on parcel declarations

By reforming low-value import rules, authorities aim to prevent practices like the undervaluation of goods, the use of incorrect product classification, and splitting shipments into multiple parcels.

Because of this, it is likely that there will be higher scrutiny on parcel declarations to make sure shipments are valued and classified accurately. 

 

Compliance requirements for Asia-Europe shipments

To remain compliant with new customs rules, Asia-Europe importers should:

  • Accurately classify their products: Importers should use the correct tariff codes and accurate product descriptions to avoid delays, audits, or penalties. 

  • Correctly value their goods: Importers should provide correct information about the product price, shipping costs, and insurance if required. Undervaluation would be considered a large compliance risk. 

  • Store and submit electronic data: Customs reforms are likely to introduce centralised customs data systems in the future, so importers should be prepared to submit more detailed electronic data to comply. 

 

Changes to documentation and duty collection

The new customs reforms will also result in changes to documentation and duty collection:

  • More detailed customs declarations: Import documentation will need to be more detailed, including correct tariff codes, accurate product descriptions, correct product values, and country of origin. Incomplete or inaccurate documentation can result in delays, additional inspections, and reclassification. 

  • Duty collection at the point of sale: For ecommerce businesses, they may consider shifting their models towards pre-paid duties, where duties are calculated at checkout. This is because it helps prevent customs delays and can improve delivery predictability. 

  • Incoterms and shipping models: Importers may need to reassess the incoterms they are using to ensure duties are handled efficiently. For example, DDP shipping will ensure duties are calculated and collected at the point of sale, whereas DAP shipments may require additional processing to assess duties before delivery, slowing fulfilment. 

 

What do EU & UK customs changes mean for businesses?

The reform presents several challenges—and opportunities—for e-commerce sellers exporting to the EU.

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.

Higher compliance burden

Businesses must prepare to provide more accurate data about the value and classification of their shipments in order to remain compliant. They will also need to consider digitalising data to remain compliant with future centralised data systems. 

Potential delivery delays

During the transition period, customs processing times may increase. Businesses should communicate expected changes and possible delays clearly to their customers.

Stronger competition from EU and UK-based sellers

The changes to customs rules only apply to those outside of the country or countries implementing the rules. This gives EU or UK-based retailers a pricing advantage. Overseas sellers may need to consider:

  • EU or UK fulfilment centres

  • Local warehousing options

  • New logistics strategies to reduce delivery times and duty exposure

 

How to prepare for the 2026 EU customs changes

For overseas sellers, there will be a higher cost for compliance and potentially reduced margins. 

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!