The era of EU small tax-free is over! 150 euros tariff exemption cancelled early

On November 13, local time, finance ministers from 27 EU countries reached a historic decision in Brussels: the tax exemption policy for imported parcels under 150 euros, originally scheduled to be abolished in 2028, will be implemented ahead of schedule in early 2026.

This means that in two years, all goods entering the EU—regardless of value—will be subject to customs duties and VAT, and each parcel will be charged an additional “customs clearance handling fee” of about 2 euros (parcels shipped from overseas warehouses will be reduced to 0.5 euros).

Image source:VAT Calc

Policy Upheaval: From Buffer to Sudden Change

This adjustment far exceeds market expectations.

When the EU first proposed abolishing the small-value exemption policy in 2023, the transition period was set at five years. However, the latest data shows: in 2024, the number of low-value parcel imports to the EU soared to 4.6 billion, doubling from 2023. Among them, 65% of parcels were deliberately undervalued, and 91% came from Chinese e-commerce platforms.

“The urgency of the current situation can no longer be delayed,” EU Commissioner Maroš Šefčovič emphasized in a letter to finance ministers. The original 2028 timetable has been completely overturned, with a phased tax plan to begin in the first quarter of 2026 and the full implementation of the 2-euro surcharge by the end of the year.

Even more severe, countries like France and Romania have already taken the lead. France plans to impose a separate small parcel management fee in 2026, while Romania has even proposed a high fee of 5 euros per parcel, forcing the EU to accelerate the unification of policy implementation.

Image source:bloomberg

Global Crackdown: The Disappearance of Tax-Free Benefits

The EU is not alone—a global tax crackdown on cross-border small parcels is spreading:

United States: On August 29 this year, the tax exemption policy for parcels under $800 was abolished, causing the volume of Chinese small parcel exports to the US to plummet by 80% in a single week, and 88 postal operators suspended services

United Kingdom: Plans to abolish the £135 import tax exemption in the Autumn Budget on November 26, expected to recover £600 million in tax losses annually

Japan: The Ministry of Finance is coordinating the cancellation of tax benefits for personal imported goods, with new policy details to be released in 2026.

Image source: Nikkei Chinese website

Industry Impact: The End of Low-Price Strategy and Transformation to Branding

For cross-border sellers, the abolition of tax exemption policies means a fundamental change in cost structure.

Take a product with a cost of 50 euros as an example. Previously, it could avoid about 12% customs duties through the exemption channel for goods under 150 euros. After the new policy is implemented, similar products will have to bear an additional 6 euros in taxes and fees. If VAT, transportation, and platform commissions are added, the profit margin will be further squeezed.

The more far-reaching impact lies in the transformation of business models.

In the past, many sellers relied on the strategy of “small parcels + low-price dumping” to quickly capture the market, but in the future, this model will be difficult to sustain. The EU’s anti-fraud measures have clearly targeted behaviors such as “split shipments” and “false value declarations,” and the upgrade of regulatory technology (such as electronic customs declaration and data interconnection) will make violations impossible to hide.

Image source:VAT Calc

The EU’s policy of abolishing tariff exemptions is both a reflection of the rise of global trade protectionism and a watershed moment for cross-border e-commerce moving from wild growth to regulated development.

For sellers, short-term pain is inevitable, but in the long run, only by breaking out of price wars and turning to product innovation and brand building can they gain a foothold in the new era of trade. In the future, global cross-border e-commerce competition will no longer be about “who is cheaper,” but “who is more valuable.”