EU Customs Reform: What Changes on 1 July 2026?

From 1 July 2026, the EU will remove the €150 customs duty de minimis threshold for imports into the European Union.

This is a customs reform — not a VAT reform — but it will still affect businesses using IOSS.

Let’s break this down properly.

Currently:

• Goods valued at €150 or below are exempt from customs duty.

• These goods can use the H7 simplified declaration.

• Many low-value eCommerce imports rely on this structure.

From 1 July 2026:

• The €150 customs duty exemption will be removed.

• Customs duty may apply regardless of value (depending on tariff classification).

• Full customs declarations will become more common.

• The simplified low-value import environment will narrow.

This is an EU-wide structural customs change.

There is a common misunderstanding between the customs code and the vat directive when we discuss IOSS shipments.

IOSS was introduced to:

• Simplify VAT reporting for B2C imports under €150.

• Allow VAT to be collected at checkout.

• Avoid import VAT collection at the border.

IOSS does not remove customs duty.

The reason duty was often not charged is because:

• There was a separate €150 customs duty exemption.

• Most low-value goods fell under that threshold.

That exemption is what disappears in July.

1️⃣ VAT Treatment Under IOSS

No change.

• VAT must still be collected at checkout.

• IOSS returns continue monthly.

• Import VAT exemption still applies when IOSS is valid.

The VAT framework remains intact.

2️⃣ Customs Duty Exposure

From 1 July:

• Goods under €150 may still require customs duty.

• Duty rates will depend on the tariff code.

• IOSS does not remove that duty.

This means:

• Sellers using IOSS may still have duty liability.

• Pricing models may need adjusting.

• Margin assumptions based on “low-value = no duty” will no longer hold.

3️⃣ Declaration Complexity

We expect:

• Reduced reliance on H7 simplified declarations.

• Increased use of full customs declarations.

• More tariff code scrutiny.

• Greater data requirements.

Even if IOSS remains valid for VAT, customs processes will become heavier.

Action Plan for eCommerce Sellers

Businesses should now:

• Review tariff classifications.

• Model duty exposure below €150.

• Recalculate margin on low-value goods.

• Assess whether DDP structures need adjustment.

• Prepare for increased clearance documentation.