Regulatory updates - EU

The EU Council has approved a fixed customs duty of €3 on small parcels valued under €150 entering the European Union, primarily through e-commerce channels. This rule takes effect 1 July  2026. 

The measure aims to address challenges created by the current duty-free status of low-value parcels, including: 

• Unfair competition for EU businesses 

• Consumer health and safety risks 

• High fraud levels 

• Environmental concerns 

The €3 duty will apply per item category in a consignment, based on tariff headings. It covers goods sold by non-EU sellers registered in the EU’s Import One-Stop Shop (IOSS) for VAT purposes, which represents about 93% of all e-commerce flows into the EU. 

This change could make shipping small parcels less economical, pushing sellers to encourage larger orders or shift to EU-based warehouses. Consumers should expect higher prices and fewer free imports. 

Future Directions: 

Several Member States are introducing national parcel fees alongside this EU measure. For example, Romania will apply a €5 fee on parcels under €150 starting January 2026, France and others are considering similar charges. These national fees differ from the EU’s €3 duty but may coexist until a harmonized handling fee is agreed. 

Looking ahead, the €3 duty is only the beginning. By 2028, the EU plans a comprehensive customs reform that will: 

• Remove the €150 exemption threshold 

• Apply duties using simplified tariff classifications 

• Require more data from sellers and platforms 

• Introducing a stronger role for the EU Customs Data Hub 

The cross-border EU e-commerce landscape will change gradually, bringing higher costs for consumers and requiring foreign sellers to revise their logistics and strategies. The upcoming phase will reshape data collection, impose stricter regulatory oversight, and ensure more equitable competition between EU-based retailers and global marketplaces. 

The European Business Wallet is proposed under the EU's wider agenda to support a well-functioning single market. Currently, the use of digital tools in business operations varies significantly among Member States, which hampers fair competition and disproportionately affects SMEs and micro-businesses. The proposal lays the groundwork for a harmonized digital framework expected to generate up to 150 billion EUR in yearly savings for businesses.

Who is affected by the proposal?

The proposal targets both public sector bodies and businesses.

• Public sector bodies: Would be required to offer the core functions of the European Business Wallet in interaction with businesses.
• Businesses: No obligations are proposed. Businesses may choose to use the European Business Wallet in interactions with public entities, and in their own commercial operations.

What are the use-cases of the European Business Wallet?
The European Business Wallet aims to reduce administrative burden by allowing businesses to prove their identity, apply electronic signatures, seals and timestamps according to current eIDAS regulations, and exchange data digitally with full legal value. Potential use-cases include:

• Know-your-customer (KYC), due diligence and contractual onboarding
• Branch creation, cross-border VAT registrations and startup funding
• B2G interactions such as eProcurement, including submission and receipt of documents and official notifications, licensing, and regulatory reporting (including ViDA VAT attestation and transaction data, and sustainability reporting).

The proposal underlines that the Business Wallet will build on the architecture and trust framework defined for the European Digital Identity Wallet initiative for natural persons. It also highlights the need for interoperability between systems to access and exchange European Business Wallet data. Detailed technical information on how integration with the European Business Wallet will be enabled is yet to be published by the European Commission in further implementing acts.

Timeline

The proposal will be submitted to the European Parliament and Council for approval. Once adopted, all levels of public administration across the EU, would have two years for implementation, with transitional measures in place to support adaptation of administrative and IT systems.

To create a more uniform and interoperable e-invoicing framework for public procurement across Member States, the EU Commission has announced plans to revise the EU’s rules on e-invoicing in public procurement.

The initiative aims to address challenges that have prevented the e-invoicing Directive from fully achieving its objectives. These challenges include a lack of uniformity in invoicing rules, differences in national transmission and certification practices, and uneven adoption of the EU e-invoicing standard.

Key elements of the initiative

• Introduction of the mandatory issue of e-invoices compliant with the European e-invoicing standard by suppliers;
• Extension of the e-invoicing Directive’s scope to cover B2G transactions below the EU public procurement thresholds;
• Introduction of common transmission methods based on the e-Delivery Building Block and harmonized requirements for certification schemes.

The proposed changes could be used as an alternative or supplement. The Commission emphasized the importance of utilizing existing EU instruments and initiatives for planned changes. This approach aims to avoid unnecessary costs while focusing on opportunities to simplify processes and reduce administrative burdens.

The planned changes are expected to result in:

• Greater interoperability across the EU through harmonized formats and transmission channels;
• Reduce costs for businesses through reduced complexity and consolidation of e-invoicing solutions;
• More efficient public procurement processes and lower market-entry barriers.

Next steps

A call for evidence is open for four weeks until December 17, 2025, and feedback can be given here.

Following the call for evidence, a 12-week public consultation and targeted consultations with relevant stakeholders will be conducted, followed by Commission adoption planned for Q4 2026.