How the EU €3 Customs Duty Affects Cross Border Ecommerce and Dropshipping

Cheap packages entering the EU will be charged a tax of €3 per item from next July, the bloc’s 27 finance ministers agreed on last Friday. The deal effectively ends the tax-free status for packages worth less than €150.

What does this temporary EU customs duty mean for cross-border e-commerce sellers?

If you are a cross-border e-commerce seller relying on low-cost, small items for high-volume sales, the new EU €3 flat customs duty may pose significant challenges. 

It’s important to understand that this policy is not specifically targeted at dropshipping, nor is it limited to Chinese suppliers shipping directly to EU consumers. The €3 customs duty mainly applies to non-EU e-commerce sellers registered under the IOSS system, covering approximately 93% of e-commerce imports into the European Union.

As a professional China-based dropshipping agent, SourcinBox highlights the key points that cross-border sellers need to pay attention to and provides practical strategies to help you prepare ahead.

Key Takeaways: New Taxation Policy in EU Countries

You might be wondering when this new tax will come into effect, who ultimately pays the tax, and how the duty is calculated. Below, we break down these three key questions.

When Does It Take Effect

• 1 July, 2026.

The €3 duty is a temporary measure ahead of the EU Customs Reforms 2028 and is separate from the proposed EU handling fee on e-commerce parcels, which remains under negotiation.

Who Pays the Tax

• Ultimate Burden: The €3 duty is technically an import duty tariff, and the final tax falls on the EU end consumer (the buyer).

• Seller Responsibility: Cross-border e-commerce sellers, whether based in the EU or outside, are responsible for ensuring proper handling of the duty if the goods worth less than €150 are shipped directly from outside the EU to the EU buyer.

How Does the €3 Duty Work

“The €3 duty will be applied to each different item, according to their tariff headings, contained in a consignment.” It’s important to note that the tax is calculated per item, rather than per parcel. 

Example:

• Parcel (worth less than €150) contains 10 identical phone cases, one tariff heading, €3 EU fee ( + €X EU handling fee in the future)

• Parcel (worth less than €150) contains 10 identical phone cases, 10 charging cables, two tariff headings, €6 EU fee ( + €X EU handling fee in the future)

That is, the flat tax will apply to each type of item in a package. The €3 duty is calculated based on the number of different customs tariff headings within a parcel under €150.

Additionally, the customs duty is separate from VAT, which will continue to be declared and paid via IOSS where applicable. The €3 customs duty is an import duty tariff, while VAT is a consumption tax. 

As the new tax has not yet officially taken effect, the detailed implementation of this import duty has not been announced. SourcinBoxwill keep this article updated with any new information as it becomes available.

How This Affects Cross-Border E-commerce Entering the EU

The new €3 customs duty applies to low-value parcels (≤ €150) imported into the EU from non-EU countries. It is charged per HS code (tariff heading) within a parcel and collected during import clearance. 

If multiple items share the same HS code, the duty is charged once per code. Goods already stored in EU warehouses are exempt from this duty.

This means that cross-border e-commerce sellers shipping directly from outside the EU may see increased costs for low-value items. This may impact profit margins and pricing strategies.

Declining Margins on Low-Value Products 

Profit margins for low-cost product categories are shrinking significantly. The core of the new tax is that the €3 customs duty is applied per item category (tariff heading) within each parcel, directly compressing the profits of low-priced goods.

Products such as daily household items, small electronic accessories, and affordable clothing typically rely on a low-margin, high-volume business model. The EU’s €3 import duty can erode thin profits, and even turn some low-cost items from profitable to unprofitable.

Rising Costs Force Price Adjustments

The EU €3 customs duty per parcel directly impacts the cost structure for cross-border e-commerce sellers. To maintain basic profitability, sellers may need to adjust product prices accordingly.

Any parcel worth less than €150 entering the EU must pay the €3 customs duty, no matter the item is low-priced or mid- to high-priced. For example, a small item priced at €15 would see the duty represent 20% of its selling price, while a €50 item would face a duty of only 6%. This clearly shows that low-cost products are under greater profit pressure, whereas higher-priced items are better able to absorb the duty and maintain profitability.

Accelerating Local & Virtual Warehouse Setup

An increasing number of sellers are turning to localized warehousing solutions. The implementation of the EU €3 customs duty increases the cost of direct shipping from non-EU countries. To lower EU import duty tariffs and enhance customer experience, cross-border sellers are exploring solutions like setting up physical warehouses in the EU or using virtual warehouse models.

Shipping from local warehouses allows goods to clear customs before reaching the consumer, avoiding the €3 duty. It also shortens delivery times and reduces transportation risks, helping sellers control costs while enhancing customer satisfaction and repeat purchase rates. In the future, strategic logistics and warehouse planning will become a critical factor for cross-border e-commerce sellers to maintain profitability and competitiveness in the EU market.

Small Sellers May Exit the EU Market

Some small sellers may face the risk of being forced to exit the EU market. For sellers with weak cash flow and limited supply chain bargaining power, the increased costs from the €3 customs duty, combined with the need to raise prices to maintain profitability, may lead to declining sales and create double pressure. Unlike larger sellers, they cannot leverage bulk inventory to spread costs, nor can they easily absorb long-term losses.

In contrast, small sellers without access to reliable dropshipping partners or compliant dropshipping agents may face market exit risks exceeding 30%. On the other hand, by partnering with a trusted dropshipping agent, sellers can effectively reduce operational costs, maintain profitability, and stay competitive under the new EU regulations.

How Dropshippers Handle The New EU €3 Customs Duty

Before the new EU customs duty comes into effect in July 2026, dropshippers can take proactive steps in three key areas: product selection, pricing & customer experience, and supplier partnerships. Early preparation can minimize cost pressures caused by the duty, enhance customer satisfaction, and maintain competitiveness in the EU market.

Recommended Reading:

• Everything You Need to Know About the Dropshipping Tax.
• How to Do Dropshipping in the EU in 2026.

Choose High-Value Products

For cross-border e-commerce dropshippers targeting EU consumers, product selection strategies need to adapt to the new €3 customs duty. When choosing products, dropshippers should focus on profit margins, product value, and customer acceptance to ensure each item remains profitable.

Priority should be given to high-value, high-priced items. Examples include 3C digital accessories, smart home devices, and portable beauty devices. These products typically have higher selling prices, meaning the fixed €3 duty accounts for a smaller percentage of the price and has a limited impact on overall profitability.

At the same time, non-low-cost niche products are also worth considering, such as pet supplies, eco-friendly household goods, and toys for children. These products target specific interest groups, face less competition, and can maintain both sales volume and profit margins.

For more dropshipping niches, you can read:

• The 14 Best Dropshipping Niches for 2026.

In short, dropshippers should avoid low-priced, low-margin items (e.g., €5–€20 per unit) and prioritize high-priced, high-value, or niche products to maintain profitability under the new EU customs regulations and increase the average order value.

Adjust Prices to Include Duty

To maintain basic profitability, dropshippers should factor in costs, customs duties, and target margins when setting prices, ensuring that the €3 customs duty is reasonably allocated across each unit. 

Additionally, you can clearly display “tax included” pricing on product pages to transparently communicate cost changes to customers, helping reduce price sensitivity while improving overall customer satisfaction.

Most importantly, price adjustments must balance competitiveness with profitability.

• High-priced products (€50–150): Increase prices slightly by €3–5 to fairly distribute the duty cost, with minimal impact on sales volume.

• Mid-priced products (€20–50): Use a small price increase combined with discount promotions to cover customs costs while maintaining purchase appeal.

• Low-priced products (below €20): Due to the high duty-to-price ratio and limited profit margins, consider gradually phasing out these items or replacing them with higher-value alternatives to optimize overall product mix and profitability.

Strategic pricing adjustments allow cross-border dropshippers to offset the EU customs duty while maintaining competitiveness and customer satisfaction.

Partner With A Reliable Dropshipping Agent

For small and medium-sized dropshippers, handling cost pressures alone can be challenging. Cooperation with a reliable dropshipping agent is essential. A high-quality dropshipping agent typically offers three key advantages:

• Scalable procurement and warehousing resources: By centralizing inventory, they can spread customs duties and logistics costs across multiple orders, providing partners with lower per-unit sourcing prices.

• Expertise in EU customs policies and clearance procedures: They can assist with declarations, additional duty payments, and other complex processes, reducing compliance risks.

• Integrated local delivery networks: They enable one-stop dropshipping with full shipment tracking, improving fulfillment efficiency and enhancing the overall customer experience.

SourcinBox, the professional dropshipping agent, is here to provide expert support and solutions. SourcinBox helps you optimize inventory, choose reliable shipping channels, and develop robust product selection strategies. Connect with our customer manager right now to make your dropshipping business more secure, efficient, and worry-free!

Turning EU Tax Changes Into Opportunity

Indeed, the new EU customs duty on low-value parcels has a certain impact on cross-border e-commerce sellers targeting EU consumers. For sellers relying on low-priced, low-margin products, the €3 customs duty can significantly reduce profit margins, forcing sellers to rethink their products and pricing.

However, there is no need to panic. This €3 import duty is applied equally to all e-commerce platforms and sellers, whether large marketplaces like Amazon or independent stores. Proactive planning and strategy optimization are key to maintaining profitability and increasing sales.

In fact, the customs duty also presents an opportunity to enhance business resilience and competitiveness. In the future, the traditional dropshipping model may gradually evolve into a sourcing & international logistics partnership. Dropshippers focus on products, marketing, and customer service, while professional supply chain and logistics partners handle procurement, warehousing, customs clearance, and delivery.

No matter how policies change or the market adjusts, SourcinBox will continue to provide professional, reliable, and stable dropshipping support, helping you navigate the new customs regulations, optimize operations, and maintain both profitability and customer experience. 

By planning product selection, pricing, logistics, and customer communication, you can continue to expand steadily into the EU market even after the new rules take effect, achieving sustainable business growth.

Frequently Asked Questions

1. Who actually pays the €3 customs duty?

The EU consumer ultimately pays the €3 customs duty. Sellers can include it in the product price to maintain profitability.

2. Can I still make a profit on low-priced items in the EU?

Profit margins on low-priced items will shrink. Focus on higher-value or niche products to stay profitable.

3. Is dropshipping still viable in the EU?

Absolutely. By choosing the right products, adjusting prices, and working with reliable partners, dropshipping in the EU is still possible.