The European Union is preparing a major policy change that will reshape cross-border ecommerce. Starting in early 2026, the EU plans to abolish the €150 customs duty exemption. Under the new plan:
- All imported goods valued under €150 will be subject to both VAT and customs duty
- A simplified customs declaration system will be introduced to collect these taxes
- Stricter enforcement will target undervaluation and loopholes
Understanding EU Tax Structure: Clearing Common Misunderstandings
Many sellers confuse VAT, customs duty, and IOSS. Let’s clarify these points:1. The €150 exemption applies to customs duty — not VAT
Goods below €150 are exempt from customs duty, but VAT is still required for every import regardless of value.2. IOSS handles VAT — not customs duty
IOSS allows sellers to collect VAT at checkout and remit it through a single EU portal. It does not exempt goods from taxes and does not replace customs duty. The 2026 rule simply adds customs duty for goods under €150. VAT has always applied; now customs duty will too.Looking Back: Dropshipping Always Survives Major Regulatory Changes
1. EU IOSS in 2021
When IOSS was introduced in 2021, costs increased and many feared dropshipping would decline. But:- Dropshipping in the EU continued to grow
- Germany and France remained top-performing markets
- Profit margins remained strong
2. US Removal of the $800 De Minimis Rule in 2025
Many predicted disaster when the US removed the $800 duty exemption in 2025. Instead:- Dropshipping remained strong
- Profit margins stayed high
- Competition decreased, helping experienced sellers grow faster
What Will Happen After the EU Cancels the €150 Duty Exemption?
Here’s what sellers can realistically expect in 2026:- Costs will increase (customs duty + VAT)
- Inexperienced sellers will quit
- Experienced sellers will continue to grow
- Dropshipping will stay profitable, especially in Germany & France
How Dropshippers Should Prepare for 2026
1. Partner With an Experienced Fulfillment Agent
The most effective strategy is working with a trusted supply chain partner who can:- Handle IOSS and VAT reporting
- Manage customs clearance smoothly
- Provide fast & reliable DDP shipping
- Handle regulatory changes
- Reduce risk of delays and disputes
2. Use a Fulfillment Agent With Their Own IOSS Number
This ensures correct VAT collection and prevents courier handling fees or VAT double-charges.3. Use Fast & Stable DDP Logistics
- Faster delivery times
- Lower dispute and refund rates
- Reliable tracking
- Better customer satisfaction
4. Consider EU Local Warehousing (For Stable Orders)
Using EU local warehouses eliminates customs risks and provides 2–4 day delivery — ideal for scaling brands.Why AplusFulfill Is Your Best Partner for 2026 and Beyond
1. 10+ Years of Dropshipping Fulfillment Experience
We successfully helped sellers adapt to:- EU IOSS changes in 2021
- US cancellation of the $800 exemption in 2025
- Multiple global logistics disruptions
2. We Provide a Legal IOSS Number & Full VAT Support
Covering all EU member states with smooth VAT handling and zero hidden fees.3. Fast & Reliable DDP Shipping to All EU Countries
Premium lines for Germany, France, and the rest of the EU with stable 5–10 day delivery.4. Support for Branding & Private Labeling
We help sellers grow with:- Custom packaging
- Branded inserts
- Private label products
- Improved unboxing experience
