Since 1 July 2026 the EU charges a temporary flat customs duty of 3 euro per tariff classification on consignments worth up to 150 euro sold to consumers, replacing the old 150 euro duty exemption, and it applies whichever VAT scheme you use. The seller or importer declares and pays it. VAT is separate: the Import One-Stop Shop (IOSS) lets you collect VAT at checkout for consignments up to 150 euro, so the buyer pays nothing extra on delivery. For a 30 euro item shipped to Germany, the 3 euro duty is what changes your margin most.
The two charges are different
| Charge | What it is | Who pays | Source |
|---|---|---|---|
| Customs duty | 3 euro per tariff classification (not per parcel or per unit), consignments up to 150 euro, from 1 July 2026 to 1 July 2028 | The declarant: typically the seller, the IOSS holder or their representative; consumers only in exceptional cases | European Commission |
| Import VAT | Destination country VAT rate. With IOSS it is charged at checkout and remitted by the seller’s IOSS registration | The buyer pays it in the price; the seller remits | EC explanatory notes |
The Commission’s example: five shirts in one consignment trigger one 3 euro charge; three shirts plus a watch trigger 6 euro because there are two classifications. Goods that benefit from preferential trade agreements can be exempt if VAT was not collected through IOSS and the items are declared in the H1 procedure. Product identifiers become mandatory on 1 November 2026, voluntary from 1 July 2026 (EC guidance). The flat duty ends on 1 July 2028, when the EU customs data hub for e-commerce is expected to be operational and normal tariffs apply.
IOSS in one paragraph
IOSS covers consignments with an intrinsic value not exceeding 150 euro. A seller established outside the EU that wants to use it must appoint an EU-established intermediary, who registers the seller and gets an IOSS VAT number for each seller they represent. The seller charges destination-country VAT at checkout and declares it in a monthly return; shipments then clear without VAT being collected from the buyer on delivery (EC explanatory notes). IOSS does not apply to excise goods. Ask an accountant before registering; this page is not tax advice.
Worked example: one 30 euro item to Germany
Assumptions (ours): tax-inclusive retail price 30 euro, Germany standard VAT rate 19 percent (confirm on the EC’s VAT rates page), supplier price 8 euro, shipping to the customer 4 euro. The item is a single tariff classification.
| Line | With IOSS | Without IOSS |
|---|---|---|
| Retail price paid by buyer | 30.00 | 30.00 |
| VAT inside the price (30 x 19/119) | 4.79 collected, remitted by you | 4.79 in the price, but see below |
| Revenue after VAT | 25.21 | 25.21 |
| Supplier price | 8.00 | 8.00 |
| Shipping | 4.00 | 4.00 |
| 3 euro flat duty (one classification) | 3.00 | 3.00 |
| Contribution before payment fees, ads and refunds | 10.21 | 10.21 |
Without IOSS the import VAT is collected at the border from the buyer or through the carrier’s own arrangement, so the buyer can face a second VAT bill and a handling fee on delivery; the EC notes that special arrangements exist for consignments up to 150 euro where IOSS is not used. That is the practical reason to use IOSS: the price the buyer sees is the price they pay. In a worked comparison the duty is the same in both columns; the customer experience is not.
The 3 euro duty is 12 percent of revenue after VAT here (3 / 25.21). Before it, the contribution was 13.21, so the duty removed nearly a quarter of it. Feed the numbers into the break-even ROAS formula: a contribution of 13.21 on 25.21 revenue is a 52.4 percent margin, break-even ROAS about 1.9. After the 3 euro duty it is 10.21, a 40.5 percent margin and a break-even ROAS of about 2.5, before payment fees and refunds.
What to do
- Decide whether you sell to the EU from outside it. If yes, choose an IOSS intermediary or use your carrier’s or platform’s arrangement, and confirm who declares the 3 euro duty.
- Bundle where sensible: five of the same item pay one 3 euro charge, so multi-quantity orders dilute the cost.
- Price for it. A cheap single item may not survive; check with the dropshipping pricing guide.
- Show VAT-inclusive prices and delivery expectations at checkout. See Shopify international selling for dropshipping.
- For the US side of the same problem see US de minimis.
Common questions
Is the 3 euro per parcel?
No. It is per tariff classification in the consignment, per the Commission’s guidance.
Does the 3 euro duty replace VAT?
No. VAT is charged separately, and the duty applies regardless of VAT scheme.
Method: researched from European Commission pages, checked 29 Sept 2026. The example uses invented supplier and shipping prices. Not tax or customs advice; rules for your VAT status may differ.