EU Takes First Step Toward New Era in E-Commerce Compliance

The volume of small-item shipments to the EU via online platforms has ballooned—from 1.4 billion imported low-value items in 2022 to 4.6 billion in 2024, according to the European Commission. That’s an average of 12 million parcels entering the EU every day.

This volume of direct-to-consumer deliveries presents a major challenge for EU customs authorities, who struggle to supervise the flow of goods and ensure compliance with EU regulations. To address these challenges, the European Commission unveiled an ambitious overhaul of the Union Customs Code to modernize and harmonize customs processes across the EU, and enhance real-time data exchange between businesses and authorities.

As a first step, EU member countries agreed Nov. 14 to remove the 150-euro ($174) customs duty exemption for low-value items, with a temporary mechanism allowing duties to be collected as early as 2026.

This marks the first concrete move in the EU’s broader customs reform, though some hurdles remain before it can be fully implemented. These include upgrading customs IT systems and questions about whether the planned extension of the Import One Stop Shop, or IOSS, for customs declarations will align with that timeline.

At the heart of the customs reform are two key innovations: the EU Customs Data Hub and the EU Customs Authority. These are designed to enable coordinated, risk-based controls and foster a more resilient, efficient, and responsive customs union capable of addressing complex contemporary cross-border trade.

The new Union Customs Code is particularly significant for e-commerce operators. The reform:

• Abolishes the 150-euro low-value consignment exemption.
• Introduces a simplified tariff treatment.
• Extends marketplace liability with the “deemed “importer” concept.
• Introduces use of the IOSS to settle customs duties with the applicable import value-added tax.
• Introduces a customs handling fee.

These changes are expected to have far-reaching implications for online marketplaces, logistics providers, and businesses selling directly to EU consumers. Companies will need to invest in new systems, update their internal processes, and ensure their supply chains remain transparent and compliant with evolving requirements.

Most changes specific to e-commerce are expected to apply in 2028 and some may be frontloaded in response to the sector’s rapid growth and compliance challenges—such as the recent political agreement to frontload the removal of the 150-euro low-value consignment exemption and collect the customs duties under a temporary mechanism as early as 2026.

However, several aspects of the new code remain uncertain, such as the simplified tariff treatment and the final design and timing of the handling fee.

E-Commerce Aspects

Abolishing the 150-euro low-value consignment exemption: By ending this exemption, all goods, regardless of value, will be subject to duty assessment. To ease the administrative burden, eligible goods can be classified under five “tariff buckets,” removing the need to determine the precise EU Combined Nomenclature code upon import. This refers to the eight-digit EU Harmonized System Code, similar to the US’ Harmonized Tariff Schedule.

Extending marketplace liability: The new code introduces a new definition of “importer,” stating there can only be one single importer at a time. This can be either an EU-established importer or a “deemed importer,” which typically will be the person or platform involved in supplying or facilitating distance sales.

As of 2028, an e-commerce platform that acts as the deemed importer will be liable for customs duties, import VAT, and regulatory compliance of the products on import.

Deemed importers would use the IOSS to settle customs duties with the applicable VAT. The use of the IOSS is further encouraged by the new directive simplifying VAT collection for imports. Without the IOSS, platforms would have to register for VAT in every EU member country where goods are delivered.

The aim is to shift the customs and VAT liability from the consumer to the e-commerce operator, ensuring greater accountability and transparency.

Creating a customs handling fee: The new code proposal formally introduces a Union handling fee that applies per item released for free circulation in distance sales. The fee is intended to cover the scaling costs associated with processing e-commerce imports and will be a fixed amount, at a rate established by the European Commission.

Lower rates will apply for goods released from customs warehouses that are used for distance sales, or fulfillment stock. The importer, or most likely the deemed importer, will have to pay the fee.

The European Commission has proposed classifying the fee in a way that would direct revenues to the EU budget. However, several member countries and the European Parliament oppose this, preferring to retain revenues nationally to fund increased customs checks. There also are concerns about World Trade Organization compliance, as the fee could be perceived as a fiscal import tax.

Reports from the latest trilogue meeting indicate that consensus on the nature of the fee hasn’t yet been reached and delays are expected. The proposed—and optimistic—date of implementation is November 2026.

Delays surrounding the Union handling fee have prompted unilateral action despite EU and WTO law restricting national import service charges to recover costs, unless exceptional control measures are necessary.

Romania, for example, plans a 5-euro fee on parcels under 150 euros from non-EU countries. France’s National Assembly has voted to raise the fee from 2 euros to 5 euros, effective in 2026. The Netherlands and Belgium are considering a 2-euro fee.

A rogue wave of national fees would create operational nightmares and fuel worries about unfair competition across the single market.

What’s Next

The new code represents a structural shift for e-commerce into the EU. While the operational challenges for e-commerce operators are real, the reforms create opportunities to improve transparency and build trust with consumers and regulators.

Operators active in e-commerce should now plan for cost impacts, as low-value exemptions will disappear next year, and anticipate new duties into pricing strategies. They also should upgrade their systems and review supply chains, liabilities and IT infrastructure to ensure readiness for collecting the customs duties and VAT upfront.

The EU is rewriting the rules at its borders. Operators that act early, stay informed, seek expert guidance where necessary, and adapt will be best positioned to compete in the future of e-commerce.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Esmee Kooke is an associate within the Baker & McKenzie Amsterdam N.V. indirect tax team, and focuses on inbound and outbound customs and trade matters, advising national and international clients on customs and trade compliance issues.

Thomas Kukanza is a counsel with Baker McKenzie BV/SRL in Brussels, advising clients on trade-related topics such as duty optimization programs, custom transformation initiatives, custom essentials, customs process optimization and customs compliance.

Olivier Van Baelen is a counsel with Baker McKenzie BV/SRL in Brussels, and supervises the VAT practice, advising clients on all kinds of indirect tax issues and representing clients in every stage of indirect tax disputes.

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