Table of Contents
Last updated: 3 July 2026
Editorial note: This guide has been prepared for UK businesses selling physical goods to customers in the European Union.
It explains the confirmed rules in practical terms but does not replace professional customs, VAT or legal advice.
The EU low value parcel tax is the commonly used name for a temporary customs duty introduced on 1 July 2026.
It affects qualifying online orders worth no more than €150 that are imported into the EU from countries outside the bloc, including Great Britain.
Although headlines often call it a €3 parcel tax, the charge is not necessarily applied once per parcel. It is calculated according to the different tariff classifications represented inside the consignment.
A parcel containing several identical products may therefore attract €3, while a parcel containing different types of goods could attract €6, €9 or more.
For UK online sellers, the change can affect pricing, profit margins, customs declarations, delivery terms and the information shown to EU customers at checkout.
Quick Answer: What Is the EU Low Value Parcel Tax?
The EU low value parcel tax is a temporary €3 customs duty applied to each distinct tariff-classified item category in a qualifying e-commerce consignment worth up to €150.
It applies to distance sales imported into the EU from outside the bloc. The measure started on 1 July 2026 and is intended to operate until 1 July 2028, when normal product-specific customs tariffs are expected to replace it.
The official customs guidance confirms that the duty is based on tariff classification rather than the number of physical units in a parcel.
This means:
- Five identical T-shirts under one tariff classification may attract €3.
- One T-shirt and one watch under two classifications may attract €6.
- Three different products under three classifications may attract €9.
Is It Really a Parcel Tax?
Technically, it is a customs duty rather than a general tax imposed directly on shoppers.
The distinction matters because customs duty, import VAT and carrier administration fees are separate charges.
Customs duty is charged when qualifying goods enter the EU customs territory.
Import VAT continues to apply under the relevant VAT arrangements, including the Import One-Stop Shop where applicable.
Carrier or postal fees may be charged by a courier for customs clearance, payment processing or delivery administration.
The term “parcel tax” is convenient for headlines and search queries, but businesses should use more accurate wording in customer communications. Describing it as a temporary EU customs duty can reduce confusion.
Why Has the EU Introduced the Charge?
The previous system allowed many consignments worth €150 or less to enter the EU without customs duty. That exemption was originally intended to prevent the administrative cost of collecting small amounts of duty from becoming disproportionate.
However, the volume of low-value e-commerce imports has grown substantially.
EU policymakers have also raised concerns about incorrect valuations, misleading product descriptions, unsafe goods and competition between EU businesses and overseas sellers using direct-to-consumer delivery models.
The new duty is intended to remove the advantage created by the previous exemption while allowing customs authorities to obtain more detailed information about imported products.
Although large Chinese marketplaces are frequently mentioned in reports about the measure, it does not apply only to goods from China. Qualifying imports from Great Britain and other non-EU countries may also be affected.
Which Parcels Are Covered?
The temporary duty generally applies when all the following conditions are present:
- Goods are sold through a distance-sale or e-commerce transaction.
- The goods are imported from outside the EU.
- The consignment does not exceed the relevant €150 value threshold.
- The transaction falls within the customs procedures covered by the measure.
The duty applies regardless of whether VAT is handled through IOSS, special arrangements or a standard import VAT process.
Certain goods receiving preferential tariff treatment may be handled differently when the required origin evidence and customs procedures are used.
Businesses relying on preferential origin should not assume that an item automatically qualifies merely because it was dispatched from the UK.
The product’s origin, tariff classification, VAT arrangement and declaration method all matter.
Does It Apply to Business-to-Business Orders?
The temporary measure is primarily designed around distance sales to consumers.
Businesses sending B2B consignments should confirm the correct treatment with their customs intermediary, marketplace or carrier rather than applying consumer e-commerce guidance automatically.
What About Gifts, Samples and Returns?
Genuine gifts, commercial samples and returned goods may qualify for different customs treatments or reliefs.
Their status depends on the facts of the movement and the accuracy of the declaration.
Marking a commercial order as a gift does not make it exempt and may create customs penalties or delivery delays.
How Is the €3 Customs Duty Calculated?
The €3 duty is applied to each distinct item category identified by its tariff subheading.
In this context, “item” does not necessarily mean every physical object. It refers to goods grouped under the same tariff classification.
The adopted customs rules use the example of silk and wool blouses: although both are blouses, their different tariff subheadings create two item categories and a total duty of €6.
| Parcel contents | Tariff categories | Indicative duty |
| Five identical cotton T-shirts | 1 | €3 |
| One T-shirt and one watch | 2 | €6 |
| Shoes, a phone case and a watch | 3 | €9 |
| Ten identical phone cases | 1 | €3 |
These examples are illustrative. The actual result depends on the correct classification of each product.
A business selling mixed-product bundles should pay particular attention. A relatively inexpensive order could generate several €3 charges if its contents fall under different tariff subheadings.
Who Pays the EU Parcel Duty?
The customs declarant is normally responsible for declaring and paying the duty. Depending on the sales and delivery model, the declarant may be:
- The seller or importer
- An online marketplace
- An IOSS holder
- A carrier acting as an indirect representative
- Another customs intermediary
The consumer is not intended to be the main party responsible for paying the duty directly. However, the commercial cost may still be passed to customers through higher prices, delivery charges or import costs.
A customer may also face a charge at delivery if the seller has not arranged for duties to be prepaid. The carrier could collect the customs amount and add its own clearance or administration fee.
For this reason, sellers should state clearly whether prices are delivered-duty-paid, whether import charges are collected at checkout and whether the recipient might need to pay before delivery.
How Does It Affect UK Online Sellers?
Goods dispatched from Great Britain to EU customers are imported into the EU. UK sellers making low-value consumer sales may therefore be affected even when they sell through their own website rather than a major marketplace.
The main commercial effects include:
Lower Margins on Small Orders
A €3 charge can represent a significant percentage of a low-value purchase. A €9 duty on a mixed parcel can have an even greater impact.
Businesses may need to reconsider minimum order values, shipping prices, product bundles or the markets to which certain low-cost items are offered.
Greater Importance of Commodity Codes
Using the wrong tariff code could lead to an incorrect duty calculation, customs queries, delivery delays or later assessments.
Product databases should contain accurate commodity codes, clear descriptions, genuine values, materials and country-of-origin information.
Changes to Marketplace and Courier Arrangements
A marketplace may handle customs and VAT obligations for some transactions, but sellers should not assume that every platform follows the same process.
Businesses should ask:
- Who acts as the customs declarant?
- Who pays the €3 duty?
- Is the amount included in the customer’s checkout total?
- Can the carrier add a separate clearance charge?
- What data must the seller provide?
Customer Communication
Unexpected delivery charges can increase complaints, refused parcels and refund requests. Delivery pages, checkout screens and terms of sale should explain whether import charges are included.
Is VAT Charged as Well?
Yes. The €3 customs duty and VAT are separate obligations.
IOSS allows VAT on eligible low-value imported orders to be collected when the customer pays. It can simplify the VAT process and help avoid VAT being collected again at delivery.
However, IOSS registration does not remove the new customs duty. A transaction may involve:
- VAT collected at checkout;
- the temporary customs duty;
- a carrier or postal administration fee.
Businesses should confirm how each amount is handled rather than describing them collectively as one tax.
Does the Rule Apply Differently in Northern Ireland?
Northern Ireland must be considered separately from Great Britain because goods are subject to distinct arrangements under the Windsor Framework.
For example, current Northern Ireland trading guidance states that customs declarations are not normally required for goods moving directly from Northern Ireland to the EU, while EU VAT rules continue to apply to goods in Northern Ireland.
This means a seller dispatching goods directly from Northern Ireland should not automatically follow guidance written for exports from England, Scotland or Wales.
The correct treatment may depend on:
- Where the goods are located when sold
- Where they were originally imported
- Whether they are qualifying Northern Ireland goods
- Their final destination
- The applicable VAT and customs arrangements
- Whether the goods are considered at risk of entering the EU
Businesses operating across Great Britain and Northern Ireland should obtain movement-specific guidance from HMRC, the Trader Support Service or a customs adviser.
Confirmed Rules and Separate Proposals
Several related EU customs measures have appeared in news reports, which can make the position seem less clear than it is.
Confirmed
The following points are in force:
- The temporary duty started on 1 July 2026.
- It applies to qualifying low-value distance-sale consignments.
- The charge is €3 per tariff-classified item category.
- It can apply to goods dispatched from any non-EU country.
- VAT remains separate.
- The temporary system is expected to continue until 1 July 2028.
- Product identifiers are scheduled to become mandatory from 1 November 2026.
Not the Same Measure
A separate EU customs handling fee has also been discussed. This is intended to cover customs processing costs, but it is not the same as the temporary €3 duty.
Businesses should not present a proposed handling fee as an existing fixed charge unless its amount, start date and scope have been officially confirmed.
Common Misunderstandings
“Every parcel is charged exactly €3”
Not necessarily. A parcel containing goods under several tariff classifications may attract several €3 charges.
“Every individual product is charged €3”
Not necessarily. Multiple identical products under one tariff classification may be treated as one item category.
“It only affects Chinese marketplaces”
No. The rule is non-discriminatory and can affect qualifying imports from Great Britain and other non-EU countries.
“The €3 includes VAT”
No. Customs duty and VAT are separate.
“Using IOSS removes the customs duty”
No. IOSS deals primarily with VAT and does not automatically remove customs-duty liability.
“The customer always pays”
The declarant is generally responsible, although the cost may be incorporated into prices or collected from the customer.
Real-Life Example
A UK accessories business receives a £45 order from a customer in France. The parcel contains a scarf, a watch and a mobile phone case.
If all three products fall under different tariff classifications, the temporary duty could be:
- Scarf: €3
- Watch: €3
- Phone case: €3
- Total customs duty: €9
VAT remains separate. A carrier might also charge for customs processing.
If the retailer advertised low-cost delivery without explaining these charges, either the business could absorb the cost or the customer could receive an unexpected payment request.
The seller therefore checks its commodity codes, confirms the carrier’s clearance process, reviews the profitability of mixed orders and updates its delivery information.
What Should UK Businesses Do Now?
Businesses sending low-value goods to the EU should take the following practical steps:
- Audit commodity codes. Check that each product is classified correctly and consistently.
- Confirm the declarant. Establish whether the seller, marketplace, carrier or intermediary is responsible.
- Review IOSS arrangements. Confirm how VAT and customs duty are handled separately.
- Calculate order-level costs. Test single-product and mixed-product baskets rather than assuming every parcel costs €3.
- Review margins and delivery prices. Small orders may require different pricing or minimum-order policies.
- Update customer information. Explain whether duties and taxes are prepaid or payable on arrival.
- Check product data. Maintain accurate descriptions, values, materials, origin information and product identifiers.
- Treat Northern Ireland separately. Do not rely solely on Great Britain export guidance.
- Monitor official updates. The implementation rules and separate handling-fee proposal may continue to develop.
Key Takeaways
The EU low value parcel tax is more accurately described as a temporary customs duty.
It applies from 1 July 2026 to qualifying e-commerce consignments worth up to €150 imported from outside the EU.
The €3 amount is calculated by tariff classification, meaning a parcel can attract more than one charge.
UK sellers should review their commodity codes, IOSS arrangements, carrier contracts, checkout information and profit margins.
VAT and carrier fees remain separate, while Northern Ireland requires its own assessment under the Windsor Framework.
Conclusion
The EU low value parcel tax changes the economics and administration of small orders sent from Great Britain to EU customers.
The most important point is that it is not always a simple €3 charge per parcel.
Mixed consignments can produce several charges, and mistakes in tariff classification may cause incorrect payments or customs delays.
UK businesses should establish who declares the goods, how the duty is collected and what customers will see at checkout or delivery.
Taking those steps early can reduce unexpected costs, refused parcels and customer complaints.
Frequently Asked Questions
When did the EU low value parcel tax begin?
The temporary customs duty took effect on 1 July 2026.
Is the duty always €3 per parcel?
No. It is €3 for each distinct tariff-classified item category in a qualifying parcel, so the total can be higher.
Do I have to pay duty on items shipped from the EU to the UK?
Customs Duty is generally not charged on non-excise goods sent to Great Britain when the total consignment value is £135 or less, although VAT may still apply.
For consignments above £135, the duty rate depends on the product, its value and where it originated.
What is the EU small parcel tariff?
The EU small parcel tariff is a temporary €3 customs duty introduced on 1 July 2026 for qualifying distance-sale consignments worth up to €150 imported from outside the EU.
It is applied to each distinct tariff-classified product category in the parcel, rather than simply once per parcel or once per physical unit.
What is the low-value threshold for customs in the UK?
The current low-value customs threshold is £135 for a total consignment imported into Great Britain.
Non-excise goods at or below this amount normally have no Customs Duty, but VAT is usually collected by the seller or online marketplace.
How can import tax on gifts entering the EU be avoided legally?
A genuine, non-commercial gift sent from one private individual to another may qualify for customs and VAT relief when its value does not exceed €45.
The sender must declare the contents and value accurately, as purchases cannot legally be mislabelled or undervalued as gifts.
What is the customs limit for parcels sent from the EU to the UK?
For parcels entering Great Britain, Customs Duty is normally not charged on non-excise consignments worth £135 or less.
Goods above £135 may attract duty, while VAT and courier handling fees can apply separately.
How can import duty in the UK be avoided legally?
Import duty can only be reduced or avoided through legitimate reliefs, preferential origin rules and the correct classification and valuation of goods.
Undervaluing a parcel, using a false commodity code or describing a purchase as a gift may lead to additional charges, delays or penalties.