The €150 duty-free import threshold has been one of the load-bearing assumptions of cross-border direct-to-consumer e-commerce into the European Union. Under Council Regulation (EC) No 1186/2009, parcels with intrinsic value below €150 entered the EU customs union duty-free — import VAT applied via the Import One Stop Shop (IOSS) from July 2021, but customs duty did not.

That position has now changed. On 11 February 2026, the Council of the European Union adopted Council Regulation (EU) 2026/382 amending Regulation (EC) No 1186/2009 to eliminate the threshold-based customs duty relief. The Regulation was published in the Official Journal of the European Union on 18 February 2026. From 1 July 2026, a transitional flat-rate customs duty of €3 per tariff sub-heading applies to small consignments below €150 dispatched from outside the EU directly to EU consumers. The interim duty applies until the EU Customs Data Hub becomes operational — currently expected in mid-2028 — at which point normal customs tariffs replace the flat-rate mechanism.

The framing matters and is widely misreported. The threshold is being abolished; what is transitional is the duty mechanic. The €3 flat rate is a bridging device, not a permanent reduced rate.

What the 1 July 2026 change actually is

From 1 July 2026, every category of item contained in a small consignment below €150 dispatched directly to an EU consumer from outside the EU attracts a €3 flat customs duty. The duty is levied per tariff sub-heading, not per parcel. A parcel containing items in two different tariff sub-headings attracts €6; a parcel containing items in three different tariff sub-headings attracts €9.

The Council's own worked example, from its 11 February 2026 press release, is illustrative: a parcel containing one silk blouse and two wool blouses falls into two distinct tariff sub-headings (silk garments and wool garments) and attracts €6 in customs duty, not €3.

The duty applies to consignments routed through IOSS and to postal consignments. It is collected by the customs authorities of the member state of importation. It is distinct from import VAT (which continues to operate through IOSS for sub-€150 consignments) and from the proposed e-commerce handling fee, which the European Commission expects to introduce from 1 November 2026 to fund customs administration costs.

The legal instrument is Council Regulation (EU) 2026/382 of 11 February 2026, amending Regulation (EC) No 1186/2009 as regards the elimination of the threshold-based customs duty relief.

What it isn't

It is not the full abolition of customs duty differentiation for low-value imports. From 2028, when the EU Customs Data Hub becomes operational, the €3 flat rate is replaced by normal EU Common Customs Tariff rates calculated on each consignment's classification and value. The 2026 measure is the interim step; the 2028 transition is the substantive reform.

It is not the same as the proposed e-commerce handling fee. That fee, expected from November 2026, is a separate measure intended to fund customs administration costs and operates in addition to the €3 transitional duty.

It is not a measure that applies to consignments above €150. Standard import VAT and customs procedures continue to apply to higher-value consignments, as they have done since 2021.

It is not a measure UK businesses can ignore on the basis that the UK is operating its own parallel reform. The UK's own Low Value Consignment Relief, which exempts imports below £135 from customs duty, is itself being abolished by March 2029 at the latest, as announced in the Autumn Budget 2025. A UK seller operates in both regimes — as an exporter into the EU, subject to the EU change from July 2026; and as an importer into the UK, facing the UK change by 2029.

The practical impact on UK and US sellers

Three operational consequences matter most for sellers shipping into the EU from outside.

Landed-cost recalculation from 1 July 2026. The €3 per tariff sub-heading needs to be priced into every consignment routed into the EU under IOSS or by post. For sellers shipping multi-category parcels — apparel plus accessories, electronics plus accessories, gift sets containing mixed categories — the per-tariff-subheading mechanic compounds materially. A single parcel containing items from four different tariff sub-headings attracts €12 in duty, not €3.

IOSS infrastructure becomes more, not less, important. With customs duty now applying to sub-€150 consignments, accurate tariff classification at the point of sale becomes critical. IOSS-registered consignments, with their pre-cleared customs data, will move faster through EU customs than non-IOSS routes. Sellers without IOSS are not exempt from the new duty; they simply face it at the border alongside higher customs friction.

The case for EU-based fulfilment strengthens. Goods dispatched from within the EU — typically from a Polish or other EU member state warehouse — are not subject to the new transitional duty because they are not crossing the EU customs frontier on each consumer order. The duty applies to direct-from-third-country consignments. Sellers with EU-based stock supply chains avoid the per-parcel customs friction entirely. For UK and US sellers with material EU consumer volume, the reform reinforces the structural case for an EU operational base over a direct-from-home-country shipping model.

The architectural response

For UK and US sellers, the July 2026 change is best understood as a forcing function for a structural decision that was already on the horizon. Three architectures are now meaningfully different in cost and operational terms.

Direct shipping from the UK or US to EU consumers via IOSS. Continues to work, but with the €3 per tariff sub-heading duty added to landed cost from 1 July 2026, and with normal customs tariffs replacing the flat rate from 2028. Operationally simplest, structurally most exposed to ongoing reform.

EU-based fulfilment through a third-party 3PL, with the seller's UK or US entity as the importer of record. Avoids the per-parcel customs friction once goods are in the EU. Requires Polish or other member state VAT registration. Practical for sellers in transition or testing EU volumes before committing to an entity.

EU-based fulfilment through the seller's own EU entity, typically a Polish spółka z ograniczoną odpowiedzialnością (Sp. z o.o.). The fully resolved architecture. Avoids customs friction on individual consumer orders, accesses Union OSS for VAT, accesses the UK-Poland treaty position on dividend repatriation, and positions for the ViDA Single VAT Registration reforms from 2028 that further expand OSS scope.

What comes next

The 2026 reform is the first phase of a multi-year transition. The expected sequence:

1 July 2026: Council Regulation (EU) 2026/382 transitional €3 flat duty per tariff sub-heading takes effect.

1 November 2026 (expected): Separate e-commerce handling fee introduced under the wider EU customs reform package, currently subject to ongoing Council-Parliament negotiations.

Mid-2028 (expected): EU Customs Data Hub becomes operational; the €3 flat rate is replaced by normal EU Common Customs Tariff rates; the substantive reform completes. ViDA Single VAT Registration reforms also take effect from 1 July 2028, expanding Union OSS scope.

March 2029 at the latest: UK Low Value Consignment Relief (£135 threshold) abolished, completing the parallel UK reform.

For a UK or US seller with material EU consumer volume, the strategic horizon to 2028-2029 now contains three significant customs and VAT inflection points. The architecture decisions made in 2026 should be made with that horizon in mind, not as if the current rules are permanent.