EU: Legislation and guidance on fixed €3 customs duty for e-commerce

The European Commission (EC) recently published the amended Delegated Regulation, Implementing Regulation, and related guidance on the temporary €3 fixed customs duty for low-value consignments. The guidance provides clarifications and examples on the application of the €3 temporary customs duty from July 1, 2026, as well as the introduction of new data elements that will need to be reported as of November 1, 2026. Read TaxNewsFlash

Background

From July 1, 2026, the European Union (EU) will apply a temporary €3 customs duty per item on low-value consignments with an intrinsic value of up to €150 imported from outside the EU. This will replace the current duty exemption for these consignments, which applies until June 30, 2026. The temporary duty is expected to apply until July 1, 2028, when the e-commerce provisions of the modernized customs legislation under the EU Customs Reform are expected to come into effect. The rules will apply to distance sales of imported goods, such as online purchases from non-EU suppliers.

Scope

The €3 customs duty is intended to apply per item/product category for goods in consignments with an intrinsic value of up to €150 sold as distance sales of imported goods declared for import under the import one-stop shop (IOSS) VAT return (applicable to business-to-consumer cross-border sales into the EU), as well as to postal consignments.

The €3 duty is typically payable by the declarant (i.e., the person in whose name the customs declaration is made) under the normal customs duty collection mechanism. For instance, this could be the e-commerce platform or remote seller (when selling directly to consumers) filing the IOSS return, or their customs representatives.

For IOSS shipments, the simplified customs declaration H7 dataset is generally used to lodge the import declaration. However, in certain cases, the full customs declaration H1 dataset is required even where the intrinsic value of the consignment is €150 or less. This includes, for example, goods subject to prohibitions and restrictions, such as product safety, environmental, or other compliance controls.

Definition of item

Rather than being levied per physical article in the parcel, the €3 temporary customs duty is levied per “item” in the customs declaration.

An “item” is defined as one or more goods in a consignment sharing the same tariff classification, description, and, where required by the applicable customs dataset, origin. The H1 dataset requires a more detailed tariff classification than the reduced H6 and H7 datasets.

For example, three similar garments declared under the IOSS H7 dataset may result in one €3 duty charge if they share the same six-digit Harmonized System Code. Under H1, the same goods may result in three separate €3 charges, or €9 in total, if they have different 10-digit classifications.

New reporting requirement: Product identifiers

The updated legislation introduces a requirement to provide or make available product identifiers (PIDs) to customs authorities for these cross-border transactions falling under the scope of the new duty. This requirement does not apply to other transactions, such as business-to-business sales. The objective is to improve customs controls for e-commerce imports and support more effective risk management and enforcement of prohibitions and restrictions.

The relevant PIDs are the merchant product identifier (M-PID), the non-standardized manufacturer product identifier (NS-PID), and, where available, the standardized product identifier (S-PID). Operators may voluntarily provide the required PIDs from July 1, 2026. From November 1, 2026, customs declarations for distance sales should include at least the M-PID and NS-PID. The S-PID should also be reported where it exists.

KPMG observations

The guidance confirms that the temporary €3 customs duty is intended to apply broadly to low-value distance sales of imported goods. Marketplaces, platforms, postal operators, express carriers, and other parties involved in low-value e-commerce imports should assess the impact on their customs declaration processes, product data, and pricing models.

The guidance sets out a cascade approach for determining the declarant for distance sales of imported goods. The IOSS holder is considered first, followed by the user of the Special Arrangements, usually a postal operator or express carrier, where IOSS is not used. If neither applies, the indirect customs representative of the importer, i.e., the consignee or consumer, is considered next. As a final fallback, the consumer may act as declarant, although this is generally limited to EU member states that provide a web-based declaration system for private individuals. This approach appears broadly aligned with the new concept of importer under the EU Customs Reform, which also moves responsibility closer to the party facilitating or organizing the import of the goods.

The abolition of the low-value consignment duty exemption also has implications where IOSS is not used. In that case, an H1 declaration must be filed, and regular import duties apply to the customs value, rather than the €3 fixed duty.

The new PID reporting requirement creates an additional data obligation for e-commerce imports. Operators should assess whether the required product identifiers are available in their systems, can be transferred to customs brokers or declarants, and can support reporting from November 1, 2026.

The €3 temporary customs duty should be distinguished from the proposed EU e-commerce handling fee, which is a separate measure intended to cover customs processing costs. The fee is expected to apply from November 1, 2026, but the amount remains to be determined.
 

For more information, contact a KPMG tax professional:

Philippe Stephanny | philippestephanny@kpmg.com

Thomas Sigtermans | thomassigtermans@kpmg.com