EU ends tax exemption on small parcels to curb Chinese e-commerce flood.
The European Union has agreed in principle on a significant policy shift regarding e-commerce imports, though the practical implementation details are still being finalized. Starting July 1, a three-euro tax will be applied to small non-EU parcels entering the European Union, marking the end of the existing tax exemption for consignments valued under 150 euros. This measure represents a concerted effort to address the rapid growth and competitive impact of large Asian e-commerce platforms, notably Shein and Temu.
The decision was prompted by the immense volume of imports and concerns over unfair competition. In 2024 alone, an estimated 4.6 billion consignments worth less than 150 euros entered the European market, translating to more than 145 parcels arriving every second. A staggering 91% of these imports originated from China. A month ago, EU finance ministers approved the proposal to scrap the duty-free status enjoyed by these parcels. While the measure officially applies to all non-EU countries, it is primarily aimed at stemming the flood of low-priced Chinese products that often fail to meet European standards.
European producers and retailers have increasingly denounced the influx of duty-free parcels as a form of unfair competition. Furthermore, the sheer volume of arrivals at European airports and ports has consistently overwhelmed customs officers, making thorough checks impractical. As a result, authorities find it difficult to intercept dangerous or counterfeit products before they reach consumers. French Economy Minister Roland Lescure underscored the urgency of the situation, stating that parcel arrivals from China have increased from one billion four years ago to over four billion today. He argued that these parcels constitute unfair competition for European businesses that pay taxes, making timely action essential to avoid acting "too late."
France has played a key role in advocating for the elimination of this customs exemption in Brussels, particularly following recent controversies involving Chinese e-commerce giants. While the measure was originally scheduled as part of a broader reform of the European customs system set for 2028, the 27 member states agreed in November to accelerate implementation to 2026. This accelerated timeline necessitates finding a "simple and temporary" solution for taxing billions of parcels, as the comprehensive customs data platform planned for the reform, which would significantly streamline duty collection, will not yet be operational.
The search for a transitional solution presents a challenge. According to some members of parliament, applying standard customs duties—which vary according to product category and country of origin—to small parcels would be a "Herculean task" that risks further burdening existing customs services. Consequently, Roland Lescure stated he would champion "a flat-rate tax" rather than "proportional taxation." He argues that a proportional approach would not provide sufficient deterrence, while a flat-rate tax would ensure the measures taken in Europe have a tangible impact.
However, setting up a transitional system "is not easy, because we have to do it with our existing resources," noted a European diplomat. The taxation of small parcels represents just the first step in the EU's broader offensive against the avalanche of Chinese imports. From November 2026, the taxation measures are due to be accompanied by the introduction of handling fees on these same parcels valued below 150 euros. Brussels proposed setting this fee at two euros per parcel. This additional sum will help finance the development of enhanced controls and, alongside the customs duties, aims to level the playing field between European products and "made in China" competition.
