Table of Contents
Table of Contents
Updated October 2026.
If you ship small parcels from China to shoppers in Europe, 1 November 2026 is a date worth circling. Twice, actually.
On that day, two things land at once. Product identifiers, or PIDs, become mandatory on customs declarations for low-value B2C parcels. And the EU's new €2 handling fee is expected to start. Both sit on top of the €3 customs duty that has applied since 1 July.
We first wrote this guide in June, just before the €3 duty kicked in. Back then a lot was still fuzzy. Since then the European Commission has published detailed guidance, and most of the open questions now have answers. So we've rewritten the whole thing.
Here's what changed, what it costs you per order, and what you need to get ready. Short version? Your product data matters a lot more than it used to.
A quick note before we start: this article is for operational planning. It isn't tax, customs or legal advice. Rules can be applied differently by Member State, carrier, platform and product, so please check your own setup with a qualified customs or VAT advisor.
EU Customs Reform 2026 at a Glance
There are three separate measures, and people mix them up all the time. Here they are side by side.
|
Measure
|
Starts
|
Applies to
|
How it's charged
|
Status (Oct 2026)
|
|---|---|---|---|---|
|
€3 temporary customs duty
|
1 July 2026, runs until 1 July 2028
|
B2C distance sales in consignments worth €150 or less
|
€3 per item, which in practice means per declaration line
|
In force
|
|
€2 Union handling fee
|
Expected 1 November 2026
|
All B2C distance sales, including orders above €150
|
€2 per item, same "item" logic as the €3 duty
|
Amount set at €2; the delegated act was still under scrutiny when the October guidance came out
|
|
Product identifiers (PIDs)
|
Mandatory from 1 November 2026 (voluntary since 1 July)
|
B2C distance sales in consignments worth €150 or less
|
Not a charge. It's data you must declare for every product
|
Confirmed, enforcement starts 1 November
|
Two of these cost money. One costs effort. All three hit the same parcels.
A Quick Recap of the EU Ecommerce VAT Rules
None of the 2026 changes replace the VAT rules you already deal with. They stack on top.
Since 1 July 2021, every imported parcel has been subject to VAT, no matter how cheap. The old €22 VAT exemption is gone. For goods sold to EU consumers in consignments of €150 or less, sellers usually pick one of three routes:
- IOSS (Import One Stop Shop). You charge VAT at checkout and file it through a monthly IOSS return. The buyer pays nothing extra at the door, at least for VAT.
- Special arrangements. The carrier or postal operator collects import VAT from the buyer at delivery.
- Standard import VAT. VAT is paid at import the normal way.
What did change in 2026 is customs duty. For years, goods in consignments up to €150 paid no duty at all. That relief is gone. So now you're dealing with VAT and duty, and soon a handling fee too.
The €3 Customs Duty Since 1 July 2026
Council Regulation (EU) 2026/382 removed the €150 duty relief and put a flat €3 duty in its place. It's meant as a bridge. It runs until 1 July 2028, when the EU Customs Data Hub is due to open for ecommerce. After that, normal duty rates based on tariff classification take over, unless the deadline gets pushed back.
The €3 applies whatever VAT route you use (IOSS, special arrangements or standard) and whatever declaration type is lodged (H1, H6 or H7). It even covers goods that were left out of the old duty relief, like perfume, alcohol and tobacco.
What Counts as an "Item" for the €3 Duty?
This is the part that trips people up. The duty is "€3 per item", but item doesn't mean each physical piece in the box.
The Commission defines an item as one or more goods in a consignment that share the same tariff classification, description and, where relevant, origin. And because of how current customs IT systems work, the €3 is applied automatically per declaration line. The quantity on that line doesn't matter.
So in plain terms:
- Ten identical pairs of socks on one line: €3.
- One T-shirt and two phone cases: two different products, two lines, €6.
- A necklace, two T-shirts and three plastic bowls: three lines, €9.
Fewer lines, lower duty. Simple enough. But there's a catch, and it depends on the declaration type.
H7, H6 and H1: Why the Declaration Type Changes the Bill
Each declaration type asks for a different level of tariff detail. That decides what can share a line.
|
Declaration
|
Classification level
|
What can be grouped on one line
|
3 goods, same 8-digit CN code, different 10-digit TARIC codes
|
|---|---|---|---|
|
H7 (low-value consignments)
|
6-digit HS code
|
Goods sharing the same HS code
|
One line, €3
|
|
H6 (postal)
|
8-digit CN code
|
Goods sharing the same CN code
|
One line, €3
|
|
H1 (full declaration)
|
10-digit TARIC code, split by description and origin
|
Only goods with the same TARIC code
|
Three lines, €9
|
One more rule worth knowing. Normally, customs lets declarants lump mixed goods together under the code with the highest duty rate. That shortcut is not allowed where the €3 duty applies. So no, you can't just call everything "general merchandise" and pay €3.
Which Sales Count as Distance Sales?
The €3 duty, the €2 fee and the PID rule all hang on one idea: a "distance sale of imported goods". Roughly, that means all of these are true:
- A seller (or a platform treated as the seller) supplies the goods to a buyer in the EU.
- The buyer is a consumer, or a business or public body that doesn't account for VAT on EU acquisitions.
- The goods are outside the EU when they're sold.
- The seller ships them, or arranges shipping, even indirectly.
Normal B2B shipments to VAT-registered businesses fall outside these rules. If the buyer picks up the goods or books their own transport with no help from the seller, that's not a distance sale either.
The guidance also closes two doors that some sellers were eyeing:
- Bonded warehouses. Goods sold to consumers while sitting in a customs warehouse don't count as distance sales. To sell them to EU consumers, you first have to release them for free circulation and pay the normal duties.
- Artificial grouping. If customs finds that a "single" consignment is really lots of separate consumer orders bundled to cut line counts, it'll treat them as separate orders and charge each one. Red flags include individual labels for different final addresses inside one shipment.
What Changes on 1 November 2026
Okay, this is the big one.
Product Identifiers (PIDs) Become Mandatory
From 1 November 2026, declarations for B2C distance sales in consignments worth €150 or less must carry product identifiers. The legal basis is Commission Delegated Regulation (EU) 2026/1022, which amended the Union Customs Code rules on declaration data.
Why now? An EU-wide customs control action, run with market surveillance authorities, found that a high share of low-value goods shipped straight to EU consumers didn't meet EU product and safety rules. With PIDs, if customs finds a problem with one product, it can find every other parcel holding the same product. One inspection scales to thousands.
That also means a vague description like "gift" or "accessories" won't cut it anymore. As the Commission's Access2Markets summary of the new rules puts it, product information now has to flow fully and accurately from the seller or platform to whoever files the declaration.
The timeline is short:
- 1 July to 31 October 2026: PIDs could be sent voluntarily. No penalties for missing or wrong data.
- From 1 November 2026: enforcement begins.
A small legal footnote. The current text says PIDs are needed for goods in distance sales, full stop. The Commission says it's amending that text so it clearly covers only consignments of €150 or less, which was always the intent.
M-PID, NS-PID and S-PID Explained
There are three kinds of identifier. Two are always required. The third is required when it exists.
|
Identifier
|
Declaration code
|
Who assigns it
|
Required?
|
Think of it as
|
|---|---|---|---|---|
|
M-PID (merchant product identifier)
|
C127
|
The online seller, marketplace or platform
|
Always
|
The ID a shopper uses to find the product on the site where it's sold
|
|
NS-PID (non-standardised manufacturer identifier)
|
C128
|
The manufacturer, producer or product supplier
|
Always
|
The factory's own model or item code
|
|
S-PID (standardised manufacturer identifier)
|
C129
|
The manufacturer, under a recognised standard
|
Where one exists
|
An EAN barcode, an ISBN for books, or a similar code
|
|
No S-PID
|
Y081
|
The declarant
|
When there's no standard code
|
A statement that no standardised identifier exists
|
A couple of details matter here. On a multi-seller marketplace, the M-PID is the marketplace's own product ID, not each seller's private SKU. The idea is that one product has one M-PID across the whole platform. If you sell on your own store, the M-PID is the product ID your store uses. Either way, each PID should point to exactly one product variant. A blue shirt in size M and a black one in size L are two different products.
No EAN? Here's How Y081 Works
Lots of products shipped from China don't have an EAN. That's fine. Manufacturers aren't forced to buy standard barcodes. If there's no S-PID, the declarant enters code Y081 to say so.
The NS-PID is different. It's always required. The Commission assumes nearly every factory already tracks its products with some internal code. If a supplier really has none, it's expected to create one. A manufacturer can also choose to reuse its EAN as the NS-PID, and that's acceptable.
Two things you should not do:
- Don't report batch numbers or serial numbers when a model-level code exists. The guidance calls that an infringement, because it defeats the whole point of tracing similar products.
- Don't send one PID for a line that holds several products. If two products share one declaration line and both have EANs, the declaration needs six PID entries: an M-PID, NS-PID and S-PID for each.
The €2 Union Handling Fee
The second November change is a fee, not a duty. It's meant to cover what customs spends on checking data, running risk analysis and doing controls on ecommerce parcels.
The Commission's guidance on the €3 duty and the handling fee (version of 5 October 2026) sets out the basics:
- Amount: €2, fixed, per item. Same "item" idea as the €3 duty, so in practice it's counted per declaration line.
- Start date: the tenth day after the delegated act setting the amount enters into force. When the guidance was published, that act was still under scrutiny, so the fee is expected to apply from 1 November 2026.
- It's permanent. Unlike the €3 duty, the handling fee has no end date.
- It's not refundable. Once customs accepts the declaration, the fee is due, even if the goods are later refused or sent back.
- How it's triggered: declarants add a specific code (Y126) to H1, H6 and H7 declarations for distance sales, and the fee is applied automatically.
From 1 July 2028, the fee is due to be lower for goods sold from a special customs warehouse for distance sales. The exact amount for that comes later.
Why the Handling Fee Also Applies Above €150
This one surprises people. The €3 duty only covers consignments worth €150 or less. The handling fee doesn't have that cap. Any B2C distance sale pays it, whatever the value.
So a €220 order to a consumer in Germany pays normal customs duty based on its tariff code, plus €2 per item for handling.
Is There VAT on the Handling Fee?
Yes, in most cases. The Commission treats the fee as an incidental expense of the sale, so it forms part of the amount VAT is charged on.
- Special arrangements or standard VAT: import VAT is charged on the fee along with everything else.
- IOSS: there's no import VAT at the border. But if you pass the fee on to the buyer at checkout, it's part of the sale price, so it goes into your IOSS return.
How to Get Your Product Data Ready for PIDs
Honestly, this is where most of the work is. Duties and fees are just numbers you can price in. Data takes time to collect, and some of it sits with your suppliers.
Here's a practical order of work:
- List every SKU you ship to EU consumers. Include variants. Each size and colour counts as its own product.
- Map the M-PID for each sales channel. If one product sells on two marketplaces and your own store, it may have three different M-PIDs. The one that counts is the one for the channel the order came from.
- Ask your factories for their model codes. That's your NS-PID. Put it in the purchase order or the product spec sheet, so it doesn't get lost.
- Collect EANs where they exist. If a product has none, flag it so the declaration can use Y081.
- Clean up HS codes and product names. Use specific names like "plastic cup" or "cotton socks". The same product should always carry the same code and name.
- Pass the data to whoever files the declaration. Under EU rules, the declarant is responsible for accurate, complete data. In most low-value flows, that's the IOSS holder, an indirect customs representative, or the carrier's broker. They'll need your PIDs order by order, in whatever file format they use.
If you already send order data through an ERP or a shipping platform, check whether it has fields for these three IDs. Some may not yet. Adding three columns sounds small. Filling them for 2,000 SKUs is not.
If you ship with SendFromChina, talk to our team about which EU shipping routes and logistics solutions fit your products, and what declaration data each route asks for.
How Landed Costs Change for Low-Value Parcels
Let's run a simple example. The numbers are made up to keep the maths easy. Your real costs depend on route, destination and VAT rate.
Say a shopper buys a phone case and a T-shirt in one order. The two products cost €12 together, plus €6 shipping. That's €18 in total. The two products have different HS codes, so they need two declaration lines.
|
Cost element
|
Before 1 July 2026
|
From 1 November 2026
|
|---|---|---|
|
Customs duty
|
€0
|
€3 × 2 lines = €6
|
|
Union handling fee
|
€0
|
€2 × 2 lines = €4
|
|
New charges before VAT
|
€0
|
€10
|
|
Extra VAT on those charges (at an example 20% rate)
|
€0
|
about €2
|
That's roughly €12 of new cost on an €18 order. Ouch. Now picture the same order with two identical phone cases on a single line. The new charges drop to €5 before VAT.
A few lessons fall out of this:
- Line count drives cost. Mixed baskets with many product types get hit hardest.
- Group honestly. Goods that really share an HS code can share an H7 line. Goods that don't, can't. Mislabelling to save €3 is the kind of thing PIDs are designed to catch.
- Returns cost more now. The €2 fee is not refundable. And for these low-value consignments, the quick route of cancelling the import declaration after a return is no longer available, so getting the €3 back is harder too.
- Old rate sheets are out of date. Rebuild your EU landed cost per SKU with product value, shipping, duty, handling fee and VAT.
For the shipping part of the sum, SendFromChina's shipping cost calculator gives you a starting estimate. Duty and VAT figures should still be checked with your tax advisor.
Why Low-Margin Products Are Most Exposed
A flat €5 per line barely registers on a €90 jacket. On a €4 hair clip, it's more than the product.
The products under the most pressure tend to be:
- Phone accessories and small gadgets
- Cheap jewellery and hair accessories
- Low-priced toys and stationery
- Small home and kitchen items
- Multi-item bundles where each item is a different product type
Look at profit SKU by SKU, not store-wide. You'll probably find some products still work as direct parcels, some need a price rise or a bundle rethink, and a few just don't make sense for EU buyers anymore. That's not fun, but it's better to find out now than in your December numbers.
Customer Experience Risk: DDP vs DDU
Want to lose an EU customer? Send them a surprise bill at the door.
If duty, the handling fee and VAT aren't collected at checkout, the carrier may collect them on delivery. Some buyers simply refuse the parcel. Then you get the return, the refund request, maybe a chargeback and a one-star review.
DDP (Delivered Duty Paid) means duties and taxes are paid upfront, so the buyer pays nothing more at delivery. DDU (Delivered Duty Unpaid) means the buyer handles any import charges when the parcel arrives. That's simpler for you at checkout, but the buyer needs to know it's coming.
DDP coverage and terms vary by route, destination and declared value. So before you promise "no extra charges at delivery" on your product pages, confirm the route actually supports it. If you go DDU, say it clearly at checkout.
The Netherlands Gateway Model, Done the Compliant Way
Some sellers are moving their top-selling EU products into a warehouse inside the EU. The Netherlands is a popular choice.
The idea is straightforward. You ship stock in bulk from China, clear it through customs as a normal commercial import, and store it in an EU warehouse. Then you fulfil EU orders locally. Because the goods are already in free circulation when a shopper buys them, each order ships as a domestic or intra-EU delivery, not a fresh import.
Let's be clear about what this is and isn't:
- It's not a way to skip duty. The bulk shipment pays normal customs duty and import VAT based on its tariff codes. You also take on warehousing, VAT registration and possibly a fiscal representative.
- Bonded storage doesn't count. As noted above, selling to consumers straight out of a customs warehouse isn't a distance sale. Goods have to be released for free circulation first.
- Fake bulk shipments get unpicked. Pre-labelled consumer parcels shipped as one "bulk" consignment will be treated as separate orders.
Done properly, the model has real upsides. Delivery is faster, buyers don't face import charges at the door, and returns are easier to handle locally. For B2C sales across several EU countries, sellers usually report VAT through the OSS scheme.
Why the Netherlands in particular? It has big ports, a deep warehousing and fulfilment market, and good road links across Europe. Some businesses also use the Dutch import VAT deferment (often called the Article 23 licence), which lets eligible importers account for import VAT in their VAT return instead of paying it at the border. Eligibility rules apply, and you'll need local tax help to set it up.
China Direct Shipping vs EU Warehousing
There's no single right answer. Most sellers end up doing both.
|
Direct parcels from China usually fit when
|
EU warehousing usually fits when
|
|---|---|
|
You're testing EU demand for a product
|
EU sales for that product are steady and predictable
|
|
Margins can absorb duty and the handling fee
|
Per-line charges are eating the margin
|
|
You sell a long tail of SKUs in small volumes
|
A handful of bestsellers drive most EU orders
|
|
Buyers accept longer delivery times
|
Buyers expect fast delivery and easy returns
|
|
You also ship worldwide from the same stock
|
You can forecast EU stock without big write-off risk
|
A common setup is to keep new and long-tail products in China and ship them direct, then move proven EU bestsellers into a European warehouse. Our guide to China fulfillment vs local fulfillment walks through the same trade-off for other markets. If you want to keep inventory in China and ship globally, see SendFromChina's China warehousing service.
Seller Checklist Before 1 November 2026
Run through this before the deadline, not after:
- Do you know every SKU you ship to EU consumers, including variants?
- Does each one have an M-PID for each channel, an NS-PID from the factory, and an EAN or a Y081 flag?
- Can your ERP or shipping tool pass those three IDs to your declarant?
- Are HS codes and product names clean and consistent?
- Have you rebuilt EU landed cost per SKU with the €3 duty, the €2 fee and VAT?
- Have you checked which orders go over €150, since those still pay the handling fee?
- Is your IOSS registration and setup correct, if you use it?
- Have you decided on DDP or DDU per route, and is checkout messaging clear?
- Is your returns process updated, given the fee is non-refundable?
- Have you looked at which bestsellers might be better stocked in the EU?
Don't forget product rules either. Batteries, electronics, cosmetics, liquids, powders and toys get extra scrutiny, and PIDs make it easier for customs to spot repeat problems. Check SendFromChina's list of prohibited items, our battery shipping regulations and our packing materials page. Once parcels are moving, you can follow them with order tracking.
What Comes Next: The EU Customs Data Hub in 2028
November isn't the end of it. On 16 September 2026, the European Parliament and the Council adopted the wider EU Customs Reform, the biggest overhaul of the Customs Union since 1968.
The parts that matter most for ecommerce:
- A single EU Customs Data Hub. It becomes mandatory for ecommerce imports on 1 July 2028, and for all traders from 1 March 2034.
- Platforms and sellers take on more responsibility. As "importers for distance sales", they'll report sales to customs soon after they happen. They'll also be liable for duties and fees and for product compliance, rather than the end consumer.
- The €3 duty ends. Once the Data Hub is running for ecommerce, normal duty rates based on each product's tariff code are due to replace it.
The Commission calls the PID rule a "first step". Fuller product data requirements are expected once the Data Hub goes live. So the data work you do now isn't a one-off chore. It's the base you'll build on.
Conclusion
The €150 duty-free era for EU parcels is over. From 1 July, every low-value B2C order has paid €3 per line in duty. From 1 November, it also needs proper product identifiers and is expected to pay €2 per line in handling fees, and that fee applies above €150 too.
For high-margin products, this is mostly a pricing update. For cheap, mixed baskets, it can change whether shipping to Europe makes sense at all. Either way, clean product data is now part of the cost of doing business in the EU.
If you're working out what this means for your EU orders, SendFromChina's ecommerce fulfillment and order fulfillment services are a good place to start. Or get a free quote and tell us about your products and EU destinations.
FAQs
What is a product identifier (PID) for EU customs?
A PID is a code that identifies the exact product in a parcel. From 1 November 2026, customs declarations for low-value B2C ecommerce parcels must include them, so customs can trace products that don't meet EU rules.
Is the PID requirement mandatory from 1 November 2026?
Yes. PIDs could be sent voluntarily from 1 July 2026 with no penalties. Enforcement starts on 1 November 2026 for distance sales in consignments worth €150 or less.
What is the difference between M-PID, NS-PID and S-PID?
The M-PID is assigned by the seller, marketplace or platform where the product is sold. The NS-PID is the manufacturer's own model code. The S-PID is a standard code such as an EAN or ISBN. The first two are always required, and the S-PID is required where it exists.
What if my product has no EAN or barcode?
That's allowed. The declarant enters code Y081 to show no standardised identifier exists. You still need the M-PID and the manufacturer's NS-PID.
What is the €2 EU handling fee?
It's a fixed €2 per item fee that customs charges for processing ecommerce imports. The Commission's October 2026 guidance says it's expected to apply from 1 November 2026. Unlike the €3 duty, it has no end date and can't be refunded.
Does the €2 handling fee apply to parcels over €150?
Yes. The handling fee applies to all B2C distance sales whatever the value. Orders above €150 pay normal customs duty plus the handling fee.
Is the €3 customs duty charged per parcel or per item?
Per item, which in practice means per declaration line. Identical products on one line pay €3 once. Different products on separate lines pay €3 each.
Does IOSS still matter after the reform?
Yes. IOSS is still a common way to collect VAT at checkout for orders of €150 or less. It doesn't remove the €3 duty or the handling fee, but it helps avoid VAT surprises at delivery.
Do B2B shipments need PIDs?
In principle, no. The PID rule targets distance sales to consumers. Normal B2B shipments to VAT-registered businesses fall outside it.
What happens if PID data is missing or wrong?
From 1 November 2026, missing or inaccurate PIDs can be treated as a breach of the duty to give customs complete, accurate data. Deliberately using batch-level codes to dodge tracing counts as an infringement too. Expect your declarant to ask you for full data before shipping.
Want to know about our services, fees or receive a custom quote?