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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