The new 3 EUR duty per item is being introduced by the EU. Share your thoughts and ideas about it
This is going to hit anyone shipping into the EU from outside pretty hard.
Right now, packages under €150 skip customs duty entirely. Once the reform kicks in, every single item gets a flat €3 duty regardless of value, and customs declarations become mandatory on everything. That’s on top of the VAT you already need to handle through IOSS.
For a €10 product, €3 extra duty is a 30% cost increase before VAT. That’s rough for low-value items. Dropshippers sourcing from China will feel this the most.
If you’re fulfilling from within the EU though, nothing changes. Actually it levels the playing field a bit since your overseas competitors just got more expensive.
The bigger question for Shopify merchants is how this gets handled at checkout. IOSS was already complex to set up. Adding duty collection means another compliance layer. Marketplaces like Amazon and Temu will handle it automatically as deemed suppliers, but independent stores will need to figure this out themselves or rely on apps.
Are you looking at this from the merchant side or the partner/app side? Curious what angle you’re thinking about.
We at EAS Project are aggressively pushing for further details on the regulation from EU Commission TAXUD. We have indication that there would be changes to existing regulation before enforcement, which does make sense as with current regulation this is in reality an impossible task.
Since this is a duty, VAT is to be applied to the 3€ x number of HS codes.
IOSS allows for centralised clearance, allowing clearance in any EU member state, not just destination. And couriers all seem to take advantage of this. Let’s imagine a parcel is headed to Finland with VAT rate of 25,5% and the parcel is customs cleared in Germany with VAT rate of 19%. German customs CANNOT collect Finnish VAT, they have to collect German VAT. What VAT rate should the merchant collect? They do not, after all, have any say or even knowledge about the clearance country.
And that is just one example. We have been assured by Shopify that there will be a proper calculation available. The regulators just have to provide some further details on what and how to actually calculate this ****show.
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Yeah, starting from July it’s €3 per product category, so a 5-item bundle gets hit several times. Most suppliers pass that straight on per item. The one I use charges per order instead — on a bundle that’s a massive difference. Worth it for that alone if you run EU.
The Shopify duty calculator is supposed to add it on at checkout if you send goods DDP and create a DDP market. Unfortunately, as usual with this irritating duty calculator operated by Avalara, it’s not working…it’s not adding the €3 fees, it’s doing nothing. And today is launch day for these new rules. Nice one Shopify.
Same here. Reached out to Shopify early this afternoon as we had an order to France and no duty was applied, even though “Duty” shows as a line item. Shopify agent advised that maybe rollout had not fully completed and since it was a very early morning order, it might have not been charged. But surely Shopify should have implemented this 2 weeks ago, as parcels sent this past week will reach Europe after today and get hit with the charge.
They also suggested that since we use @TeemuEAS for our IOSS, maybe the EAS app overrides how the Shopify duty calculator applies the charge.
So now will write to Shopify again and to EAS because even they were unable to test how the Shopify duty calculator was going to work as it was launched on the same day.
That’s exactly what they told us this afternoon. Which is odd, because the changelog says it was rolled out on 26th June. I’ve sent them countless examples of how no products with any customs codes, going to any country in the EU have a €3 fee showing in the duty line, when they should.
In the meantime, we’ve inflated our Euro exchange rate by 5% to counteract any additional costs. We don’t use IOSS and I’m not registering for IOSS or OSS just because Shopify can’t get the duty calculator sorted (which we all pay a fee for).
As of now none of orders that came to EAS from Shopify do not contain 3 EUR duty, meaning that it is still not rolled out. We keep monitoring the situation and we will notify all our customers when we see it working.
Shopify support often suggest that EAS blocks this and that . But in reality EAS cannot block anything in the checkout since Shopify does not allow us to change anything in the checkout. so we need wait and see.
Not sure when the fix went live but as of 1 am UK, today Shopify wasn’t applying any 3 euro fee, in case that helps anyone.
Now they’ve ‘fixed’ it but it’s still wrong. If a customer buys multiple of the same product, it’s 3 Euros, but if they buy 2 different products sharing the same commodity type, it’s charging 6 euros instead of 3.
This is exactly what Royal Mail (the UK postal operator) has done also, they are charging 3 Euros per SKU instead of per commodity code.
Hi everyone,
As of today 3 EUR duty is present in Shopify. Some things for you to know:
- 3 EUR duty is available only when duties are enabled meaning that you have no DAP for orders over 150 EUR
- 3 EUR duty is not calculated on HS code line , but on the utem line. According to legislation all items with the same HS code would have to be grouped and the grouping is to be levied with the 3 EUR duty. In Shopify case it works differently - 3 EUR is calculated on item level , so if one has 2 of the same items in the checkout - 3 EUR duty is added once ,but if one has other item(s) in the checkout with the same HS code it will render another 3 EUR duty .
This is incredibly infuriating. Makes merchants look like we don’t know what we’re doing.
The new rules were all over the breakfast news in the UK so many people will have an idea of what to expect.
it is what it is…Shopify’s tax engine is very limited and one always has to remember that . There are alternative ways to set up 3 EUR duties in Shopify, but all workarounds also have limitations
At least Royal Mail have expanded their PDDP destinations in Europe.
One question though: The legislation says that if 2 items have the same HS Code, but have a different country of origin, the €3 is applied x 2. But is the duty also applied if the item is of EU origin? We import EU stock but we have the same model kits originating from S. Korea, UK and then mostly from the EU which we sell to EU customers. So would EU kits be exempt from the duty charge?
Shopify are NOT applying duty to items originating from EU countries. But this is not reflected in the Royal Mail Click and Drop online.
If the 3 items have the same HS code, but 2 are from the UK and 1 is from the USA, the total duty is €6.00 because there are 2 different countries of origin.
HI Matt ,
Your statement is not entirely correct. Country of origin may have impact on the number of times when 3 EUR applied only if the full H1 declaration is used for customs clearance by the customs agent with 8-10 digit HS code . For IOSS items simplified H7 declaration is normally used with 6 digit HS code and there is no field for the country of origin. Most operators use H7 simplified declaration and then the country of origin has no implication on the number of times 3 EUR duty is applied.
Further 3 EUR duty is applied to distance sale of imported goods of low value consignments (below 150 EUR threshold) and even though using preferential treatment is theoretically possible for goods originating in countries that have free trade agreements with EU with H1 declaration , practically it will be next to impossible to use due to the fact that H7 declaration with centralized clearance is used. So you need to be prepared to pay the 3 EUR duty.
Goods with same H6 6 digit code should be grouped and only 3 EUR duty once should be applied to such situations. Shopify and Click and Drop are not able to do such grouping. They both with apply 3 EUR to product line (specific product) not HS code line (different products grouped into one taxable line in accordance with the same H6 code).
We follow up on this situation on www.easproject.com . Do read information there and subscribe to our news letters. We have specific instructions for our customers who use Shopify and Click & Drop
Following on from this, today we received a reply from Royal Mail Click & Drop Support team that if 3 items in the same package have the same HS code but different countries of origin, then the duty applied is x 3, so €9.00 - because they are on a different line entry on the CN22 customs form.
Now we have to relay this to Shopify, because Shopify is bunding products per HS Code only, and not according to country of origin too.
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Extract from the Royal Mail reply today:
In essence if the item is different enough to be on a separate line on the customs form, it is different enough to incur a €3 fee.
For example, if you were shipping 2 T shirts, and they have the same HS, product descriptions and country of origin, you would declare-
| Product Name | Quantity | HS Code | Country of origin |
|---|---|---|---|
| T shirt | 2 | 123457890 | France |
That would incur one €3 fee.
If there was some difference- a different name, or HS code, or country of origin, they would be declared on separate lines. For example here, we are shipping two T shirts, but they have a different country of origin-
| Product Name | Quantity | HS Code | Country of origin |
|---|---|---|---|
| T shirt | 1 | 123457890 | France |
| T shirt | 1 | 123457890 | China |
This would incur two €3 fees, so a total of €6, because it is different enough to require its own line on the customs declaration.
The customs/duties cost displayed in the checkout includes Import VAT at the appropriate percentage for the receiving destination as a part of the Customs Fees. Each destination charges Import VAT at their prevailing rate of VAT, eg currently Germany 19%, Ireland 23%, France 20%, etc. Import VAT covers all landed costs, which include the goods, duty, and could also cover elements such as insurance, and postage. Each destination country applies its own government’s VAT rules to determine the amount of Import VAT charge. Royal Mail’s landed cost calculator will have applied and included the correct calculations prior to display.