Analysis: Europe moves to close tax loopholes for low-value imports, targeting Shein and Temu

On 13 November 2025, the European Union finance ministers agreed to remove the current €150 ($175.42) customs duty relief threshold for goods entering the bloc. This means that all international purchases, regardless of price, will be subject to tax. 

The rule is expected to be applied from 2028, when the EU Customs Data Hub – the central platform for interacting with customs – is operational.  

However, some changes are expected to be implemented in 2026. “The Commission, together with the Council, committed also to work on a temporary solution to collect the customs duties on e-commerce packages as early as possible in 2026,” says the EU Commission’s Directorate-General for Taxation and Customs Union. 

According to officials in Brussels, this agreement is an addition to the €2 ($2.33) handling fee proposed by the Council of the European Union in June, “to be collected by customs authorities on small consignments entering the EU through distance selling” from November 2026. 

Billions in low-value goods enter the bloc

The size of low-value goods directly imported to the EU by consumers via e-commerce reached €4.6 billion ($5.4B) in 2024. In 2023, they represented €2.4 billion ($2.8B).

Beyond the recent surge, the EU Commission pointed out that these imports “are expected to continue growing in volume at a rapid pace.”

The vast majority of the imported items (91%) under €150 ($175.42) in 2024 came from China, according to official data. Europe also highlights the rapid increase in volume: from 1.9 billion items in 2023 to 4.17 billion in 2024. 

According to the EU Commission, it coincided with “exponential growth” in Shein and Temu’s penetration in the EU market, with over 75 million users in the bloc.

This led to 65% of small parcels entering the EU being undervalued to avoid customs duties on import, the Council of the European Union states. 

Impact for European businesses

The European authorities believe that the end of tax exemption will benefit businesses within the bloc.

“This competition can become unfair and hinder the level playing field for legitimate businesses,” it says.

They note that if some sellers do not comply with EU product safety and consumer protection requirements, they avoid costs for ensuring the necessary quality, safety of materials and proper record-keeping and reporting.

Brussels also points to the effect of counterfeit, especially on small and medium enterprises. “When an SME is the victim of, for example, counterfeiting or piracy, it has a 34% lower chance of survival than SMEs that did not experience any intellectual property infringement.”

Fulfillment and cost strategies 

For Rathna Sharad, CEO and Co-founder of the cross-border logistics company FlavorCloud, EU sellers may see an increase in conversions, and retailers with “strong fulfillment and clear landed-cost strategies” will become more competitive. 

“The EU’s broader Customs Data Hub reforms will eventually create a more level playing field by reducing undervaluation and fraud that previously hurt compliant EU businesses,” Sharad adds.

Businesses and consumers

For Sharad, the tax exemption removal “will make the checkout experience far more transparent, and in many cases, more expensive, for EU shoppers buying from non-EU sellers.” 

According to her, consumers can become “more selective” with their purchase channels and “gravitate toward brands that clearly communicate delivered-duties-paid (DDP) pricing, expected timelines, and return costs before they purchase.” 

She also believes in a short-term shift toward EU-based sellers, but consumers will still shop globally. The shift toward a validation of clarity, compliance and convenience is already in motion for global shippers, according to her, due to the US de minimis removal earlier in the year.

Clothing and accessories are segments that will probably be hit the most, Sharad explains, as they heavily rely on the tax exemptions, but also dropshippers and marketplace sellers “with inconsistent product data and high misclassification rates.” 

Other countries, same rules

The most recent example of the end of tax exemptions for low-value goods was in the United States. In August 2025, the US extinguished the “duty-free de minimis treatment for all countries.” 

In the North American country, the threshold for import tax exemption and minimal paperwork was significantly higher than in the EU: $800 (€683.85). According to logistics firm DHL, this rule resulted in almost 1.4 billion packages entering the US duty-free in 2024.

Brazil adopted a similar measure in 2024, also targeting Asian online retailers such as AliExpress, Shopee, Temu, and Shein. In the country, the exemption was formerly applied to international purchases of up to $50.

From that month onward, individuals buying from e-commerce platforms outside the country would have to pay a 20% import tax. Products priced between $50.01 (€42.74) and $3,000 (€2,564.55) were subject to a 60% tax rate.