EU €3 Customs Levy on Low Value Goods: IOSS and Import VAT Guide 2026

From July 1, 2026, the EUR 3 Customs levy became part of the EU economy. From July 1, 2026, customs relief for low-value imports coming from outside the EU is abolished through adopted Council Regulation (EU) 2026/382. The EUR 3 customs levy replaced the customs relief position.   

Customs duty applies to imports of low-value goods(threshold at EUR 150 of intrinsic value), where the customer is an EU resident. 

Guidelines for Proper Duty Calculation 

Last June, the EU Commission published a revised Guidance for all interested parties on how the EUR 3 customs duty is going to be processed for exports and imports of low-value goods(consignments). To ease the compliance burden for all interested stakeholders, the Commission has also published the FAQ(updated later on) on the most common questions that have been raised. 

Considering the latest updates and available official sources, the possibility of “not understanding” how the EUR 3 customs duty is processed and how it should be integrated into the business processes is completely dismantled. 

The customs duty applies to distance sales of low-value goods, where the consignment value of the parcel does not exceed the “intrinsic threshold value” of EUR 150. The customs levy is of a temporary nature, and it should be applicable from July 1, 2026, until June 30, 2028. 

Customs Levy Accounting Principles 

The accounting rules for calculating the EUR 3 customs levy depend directly on the chosen import route. To make things a bit more “complicated” for the parties involved, the EU deployed different calculation methods for this customs levy, depending on the manner in which the goods are imported, and when the VAT becomes due. 

The e-commerce marketplaces that facilitate these sales, online vendors, logistics providers, and customs intermediaries should be very aware of these differences. The chosen calculation route defines the manner in which the duty is calculated, the total VAT is calculated, and what forms the tax(duty) base. 

How VAT is calculated depends on whether the goods are “cleared” through the Import One Stop Shop (IOSS), the Special Arrangements scheme, or under the regular EU import framework.

Customs Levy and VAT Calculation 

IOSS Imports 

When the imports of low-value goods are made using the IOSS simplified reporting scheme, the EUR 3 customs levy is in most cases exempt from VAT. The VAT base(taxable amount) is derived from the consignment total value, and the VAT is calculated at the point of sale(online checkout). 

The EUR 3 customs levy is imposed only after the final order calculation, as it becomes chargeable during the clearance procedure, at the point of entry into the EU, not at the online checkout(in general). 

This scenario is most widely used and implemented by e-commerce marketplaces, online vendors, and other importers of record. However, there are also exceptions. One of the exceptions is the case where the online vendor charges the EUR 3 customs duty for the B2C sale, at the point of sale, and then the duty becomes part of the total consideration that should be settled by the consumer. 

In such circumstances, the customs duty becomes part of the VAT taxable amount, and becomes subject to destination-based VAT. 

Imports Under Special Arrangements

In cases where imported goods are cleared under the Special Arrangements mechanism, which can be chosen when the importer doesn’t adhere to the IOSS scheme, different calculation logic is followed. When special arrangements for imports are used, the importers of record (such as portal operators or carriers) are responsible for the VAT becoming due at the point of entry(import). 

In these circumstances, the importers of record(such as carriers or postal operators) collect consideration, including VAT, from consumers, and are held accountable for tax remittance to responsible tax authorities. In this route, the VAT becomes due at the point of import(not at the point of sale), so the import VAT becomes due at the entry point, and as the customs duty also becomes payable at the point of entry, it becomes part of the tax base. 

Under the special arrangements import framework, the tax base becomes “richer” with EUR 3 customs duty, so the duty is also taxable. 

Imports Under EU Standard Rules 

Sellers or importers that import and supply low-value goods outside the clearance through the IOSS scheme or Special Arrangements, but follow the general EU rules for imports, remain subject to the principal customs and VAT procedures. 

When this clearance route is chosen, the EUR 3 customs duty should be included in the import VAT taxable amount. 

Import VAT and Handling Fee

The EU is set to introduce a so-called Handling Fee to reduce the administrative burden that Member States’ customs authorities are facing for processing millions of parcels containing low-value goods. The handling fee, from the statutory point of view, is not a new type of customs levy/duty. 

The EU-wide Handling Fee is a sort of “administrative fee” that vendors or importers of low-value goods shall collect and remit for each imported low-value consignment. As the Handling Fee isn’t a customs duty, the import VAT isn’t levied upon it, so it doesn’t become a part of the import VAT taxable amount. 

The Handling Fee for low-value imported goods should become a part of the compliance duties for e-commerce vendors, importers and customs authorities from November 1, 2026, at the earliest. 

How to Stay Compliant 

The revised customs and VAT framework for imports of low-value goods supply could trigger more than a few difficulties for different stakeholders that are part of this framework. Under the new framework, e-commerce vendors, marketplace operators, as well as other importers of records, have an option to “choose” different routes for “clearance” of low-value goods. 

The chosen route dictates the customs and VAT rules. The applicable rules define the calculation of the import VAT and reporting route. 

We have successfully assisted many businesses with their customs and VAT responsibilities under EU rules for low-value imports. In addition to successfully managing your VAT registration, we offer comprehensive VAT compliance services for your EU e-commerce sales. Such as: 

• Assistance with Tax Reporting(preparation of returns, filing, and remittance)
• Tax Advisory and Ongoing Tax Management
• Correspondence with Tax Authorities 

Takeaway 

Frequently Asked Questions