Brussels (The Brussels Morning newspaper) – The European Parliament aims to remove the €150 import duty threshold for e-commerce by March 2028, addressing under-valuation and simplifying administrative processes for businesses.
Why Is the European Parliament Removing the €150 Threshold?
The European Parliament has made some headway in its proposal to streamline VAT rules for e-commerce imports. It wants to vacate the threshold of 150 euros for import duties. Negotiations are continuing, but it has now been determined that the proposed modifications will come into effect by March 2028.
The fact that the European Commission desired to impose import duties on goods up to 150 euros, was already understood. In May last year, a proposal was first posted. Since then, the process of getting it assumed by the European Council has started.
What Are the Benefits of Removing the Import Duty Threshold?
When importing a commodity from outside the European Union, through a buy from an American or Chinese online seller, for instance, you are needed to pay import duties. However, currently orders up to 150 euros are exempted from this responsibility. In practice, many vendors on AliExpress and Temu, take benefit of this. With their low product costs, they do not need to spend on import duties. As a result, their hundreds of thousands of boxes are clogging the air freight market.
How Does the Current Threshold Encourage Under-Valuation?
According to an analysis by the European Parliamentary Research Service, the current threshold provides traders an incentive to underestimate their goods. They are falsely cherishing their goods below the threshold, leading to more inferior VAT charges and avoiding customs duties.
Removing the threshold will also lower administrative duties for businesses. Removing the threshold of 150 euros would suggest that all imported goods will need to go via the IOSS (import one-stop-shop) of the EU. This will lead to lower keeping costs. Additionally, it facilitates an administrative burden for businesses within the EU. This will make it more comfortable for online stores in the EU to trade imported goods into the EU. Negotiations are continuing in the European Council. The European Parliament has already voted in acceptance. The changes should come into development by 1 March 2028.
