European countries are implementing rules that make importing e-commerce more transparent and consistent across borders. For all orders, it is now mandated that VAT be collected at the point of checkout. Goods can then be cleared using a streamlined "green channel" for faster processing and, most importantly for e-commerce sellers, zero consignee fees.
Value-added tax (VAT) is a consumption tax added to the price of goods and services in the European Union (EU). In the context of e-commerce imports, VAT is applied to goods purchased from non-EU sellers and imported into the EU.
Register for the Import One-Stop Shop (IOSS) so you can charge VAT at checkout on parcels under 150 euros, deliver through the green channel with no surprise fees, and report through a single EU registration. From 1 July 2026, the duty-free threshold ends and a 3 euro customs duty applies per line item on parcels up to 150 euros. The IOSS holder becomes the legally responsible declarant, consolidated clearance for low-value B2C parcels is being phased out, and from 1 November 2026 a new handling fee and a mandatory product identifier per line item will apply.
Jet Worldwide offers a comprehensive suite of shipping services designed to help e-commerce businesses efficiently and reliably deliver their goods to customers across various European countries.
The EU Customs Reform (EUCR) is being implemented in stages. These are the dates that matter for anyone shipping e-commerce into the EU27:
The end of the 150 euro threshold: what it means for you
One of the most significant changes in recent EU customs policy is the practical elimination of the "low-value" duty-free threshold. Historically, many shippers relied on the 150 euro limit to avoid the cost and complexity of duty structures. From July 2026, Europe imposes a 3 euro customs duty per line item on these shipments.
The 3 euro duty is multiplied by each distinct item category, mainly identified by the 6-digit Harmonized System code and the country of origin, contained within the parcel.
Tip: group items that share the same tariff classification on a single line so the 3 euro charge is not applied more times than necessary.
These temporary fees are intended as a bridge to the comprehensive 2028 customs reforms. Note that the precise way the 3 euro duty will be billed to the private consumer is still being defined; once the legislation and carrier processes are finalized, the practical impact will become clearer.
Industry experts warn that these fixed costs risk hollowing out the Import One-Stop Shop (IOSS) scheme by making the "simplified" route more expensive and complex than standard customs procedures. If charges cannot be collected digitally, the burden may revert to couriers, reintroducing "cash-on-delivery" delays and eroding the seamless checkout experience IOSS initially promised.
The reform puts B2C shipments at its core, driven by the massive growth of low-value parcels entering the EU27. A shipment is considered B2C when it meets all of the following criteria:
Low-value shipments of 150 euros or less are in scope for both B2C and B2B. For B2B parcels up to 150 euros, the reduced H7 dataset is no longer allowed; they must be cleared through a full formal H1 declaration and are subject to actual or, where applicable, preferential duty rates.
The VAT rate applied to imported goods depends on both the country of origin and the destination country. Generally, the VAT rate applied to imported goods matches the domestic VAT rate for similar items.
Import One-Stop Shop (IOSS) is an EU-wide system that streamlines the process of collecting and remitting VAT on e-commerce imports. Non-EU sellers registered under IOSS can collect and remit VAT on their sales directly to EU customers.
Because the VAT is collected at the point of sale, the seller simply remits the total to the EU. Customers do not need to pay surprise VAT fees upon delivery, allowing sellers to offer a highly seamless shopping experience.
IOSS functions as a quarterly filing submitted to a tax authority in the same format as standard VAT OSS. It allows Canadian and US sellers to register in one single EU country while legally selling across the entire EU bloc. This means one set of reporting and one consolidated payment.
Read more: Shipping Shopify orders to Europe from Canada
One of the most practical changes in the reform is where a parcel may be cleared. This is a strong reason to use IOSS:
For example, a non-IOSS B2C order worth 60 euros sold to a customer in Italy can no longer be cleared at a central entry point in another country; it must be cleared in Italy. Using IOSS preserves clearance flexibility and keeps the consignee experience clean, which is why it remains the preferred route for direct-to-consumer sellers.
Under the reform, the IOSS holder becomes the declarant and is legally responsible for the customs import clearance:
Please note: if a platform or marketplace is registered for IOSS, IOSS use is mandatory in the import clearance, and selection per individual shipment is not possible.
Note: Registration for IOSS is not mandatory for e-commerce sellers shipping from North America to a specific country. A seller shipping exclusively to France from Quebec, for example, can choose to pay the VAT at the time of import and bypass IOSS registration entirely.
For e-commerce shipments valued under 150 euros, IOSS allows sellers and online marketplaces to charge VAT at the point of sale and remit it directly to the authorities.
Online marketplaces or direct-to-consumer (DTC) sellers are responsible for collecting VAT for orders up to 150 euros. Merchants using multiple marketplaces must keep accurate sales records corresponding to the IOSS number or customs declarant used for each transaction.
IOSS applies to online sales spanning all EU countries, including Austria, Belgium, France, Germany, Italy, Spain, and Sweden, among others. EU VAT rules for Northern Ireland are established separately under the EU-UK Joint Protocol.
For official details on IOSS and the EU VAT rules, visit the Publications Office of the European Union.
Partnering with a logistics expert simplifies the entire process. Here is how it works:
Under the reform, EU customs authorities place increasing emphasis on having an established presence within the EU that can act as Importer of Record (IOR). The Importer of Record is the entity responsible for ensuring goods are imported in accordance with the laws and regulations of the importing country. The benefits of an EU-established Importer of Record include:
From July 1, 2026, it is important to know whether you are an EU-established entity that can act as Importer of Record, or whether you use an EU-based customs representative. Be ready to provide your name and address, EORI number, VAT ID, and confirmation of whether an EU-based company can act as your Importer of Record. B2C goods should show the retail value on the commercial invoice, and it is important to understand how the Anti-Abuse Clause (Article 243(5) of the UCC Implementing Act) applies to your shipments. External advisors, including Jet Worldwide, can help you become EU-established in a compliant way through VAT and EORI registration.
While IOSS is designed for e-commerce orders sent to individuals (B2C), shipping from Canada to Europe for business purposes (B2B) requires verifying the EORI number of the consignee.
An Economic Operators Registration and Identification number (EORI number) is an identification number for businesses that import or export goods into or out of Europe. It is a mandatory part of the data set required for customs entries in all EU countries. The EORI number consists of two parts:
Targeted for November 1, 2026, a new EU customs handling fee is expected to apply to B2C shipments from the rest of the world into the EU27, with no value threshold mentioned in the proposal at this stage. It is a fixed regulatory fee charged per line item, in addition to any applicable customs duty. The exact amount, exemptions, and treatment of returns are not yet confirmed; industry estimates point to roughly 2 euros per item, but the official figure is still pending. Note that national handling fees already introduced in countries such as France and Romania are independent of the EU handling fee, and it is not yet known whether those national fees will be removed once the EU fee takes effect.
Also from November 1, 2026, all B2C goods imported into the EU27 will require a new mandatory line-item field to complete customs clearance: the Product Identifier. A Product Identifier is a unique code that clearly identifies a specific product so it can be tracked through the supply chain. There are two types:
Sellers should begin mapping these identifiers to their catalogue now, since clean, standardized product data will be essential for smooth clearance once the requirement applies.
Customs duty refunds for B2C returns of 150 euros or less are no longer available, whether the goods were cleared under a formal H1 or reduced H7 declaration. The current VAT refund rules for B2C returns are unchanged. Customs duty refunds still apply for defective goods, B2B returns, and non-distance-sales goods.
IOSS is not mandatory, but it is strongly recommended for parcels under 150 euros. Without it, the carrier charges VAT to the consumer on delivery, usually with an added fee, and a non-IOSS B2C parcel must be cleared in the destination member state. IOSS lets you collect VAT at checkout, deliver through the green channel, and report through a single EU registration.
From 1 July 2026, parcels up to 150 euros lose the duty exemption and a 3 euro duty applies per line item, identified mainly by the 6-digit HS code and country of origin. Each distinct tariff category attracts its own charge; multiple identical items on one line attract a single charge.
It must meet all of these: shipped from a non-EU country into an EU member state, the seller is a business, the final consignee is a private consumer, transport is arranged by the seller, the goods ship directly to the consumer and pre-labelled, and they are intended for private consumption.
Under current understanding, consolidated clearance is no longer possible for low-value B2C parcels of 150 euros or less. High-value B2C parcels above 150 euros and B2B parcels are not affected. Carriers now need individual data for each parcel.
The IOSS holder becomes the declarant and is legally responsible. The carrier clears on behalf of the IOSS holder, not the consignee, and will request the holder name and address, EU-establishment status, EORI, and VAT ID. If a marketplace is registered for IOSS, IOSS use is mandatory and cannot be selected per shipment.
A new EU customs handling fee per line item (a regulatory fee in addition to duty, amount not yet confirmed), and a mandatory Product Identifier per line item for all B2C imports, which can be a merchant identifier or a manufacturer identifier such as an internal SKU or a standardized GTIN, MPN, or EAN.
No. Duty refunds are no longer available for B2C returns of 150 euros or less, under either H1 or H7 clearance. VAT refund rules for B2C returns are unchanged. Duty refunds still apply for defective goods, B2B returns, and non-distance-sales goods.
For B2B shipments you must verify the consignee EORI number. An EORI number identifies businesses importing or exporting goods into or out of Europe and is a mandatory part of the customs data set in all EU countries.
The import landscape into Europe presents a massive growth opportunity. European consumers are accustomed to paying VAT, and charging it transparently at checkout actually builds brand credibility. Knowing your goods will be delivered without hidden import fees is a major competitive advantage.
Resource: Useful information regarding import duty calculations
Jet Worldwide provides global logistics solutions tailored for Canadian and US businesses. Our logistics support augments your team, ensuring you are never restricted by a single carrier or rigid process.
Timothy Byrnes — Jet Worldwide
Timothy has led Jet Worldwide, a Montreal-based international logistics and customs brokerage firm, since 1988, specializing in Canada-Europe e-commerce, IOSS, and EU customs compliance. More about our team.
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