How to Prepare EU Shipments: Customs Compliance in 9 Steps

IOSS, HS codes, customs descriptions, product identifiers, billing. The practical 9-step guide to bringing your shipments into compliance and clearing EU customs without delays.

This guide is for stores shipping from outside the EU (UK, Switzerland, US, Asia…) to European buyers. If you ship from within the EU to EU customers, these rules do not apply to you directly.

Quick answer: Since 1 July 2026, the customs duty exemption on e-commerce parcels under €150 is gone and a flat €3 duty per tariff subheading applies (EU Regulation 2026/382). Nine things to get right: reliable HS codes, proper customs descriptions, accurate origin declaration, IOSS registration and a designated declarant, product identifiers ready (mandatory from 1 November 2026), complete electronic data sent before the parcel, DDP billing rather than DAP, smart parcel composition by tariff category, and recalculated margins. The quality of your commercial invoice data is the single biggest lever for clean clearance.

What Changed on 1 July 2026

Three things not to mix up: the €150 duty-free threshold disappears (VAT has been due since 2021, that is a separate matter); a flat €3 duty applies per tariff subheading on B2C distance sales under €150 shipped to an EU consumer from a third country; and this is a transitional regime until 1 July 2028, before the switch to standard customs duties and the EU Customs Data Hub. The flat fee is per product category, not per unit: five identical t-shirts owe €3, a t-shirt and a watch owe €6.

For the detail behind the regulation, where it came from and its impact on margins, see our dedicated article: EU €3 Customs Duty: The Anti-Shein Reform That's Also Hitting Small E-Commerce Sellers. This guide focuses on execution: what you need to put in place, concretely, to comply.

Step 1 : Get Your HS Codes Right

This is the foundation of everything else. Because the €3 duty is calculated per tariff subheading, every product must carry an accurate HS code. A missing, wrong, or copy-pasted code leads to unexpected duties, delays, and rejected parcels.

In practice:

• Assign every SKU a minimum 6-digit HS code; most carriers shipping into the EU expect 8 digits.
• Audit your catalogue now, especially if you have not reviewed it recently.
• Remember: classification determines what you pay. A well-classified parcel means a predictable customs bill.

For the step-by-step method (where to search, how to read a tariff schedule, the US 10-digit case), see our dedicated guide: HS & HTS Codes: Avoid Customs Delays. If you use ParcelRush, HS codes are suggested by AI as you enter each product: less manual research, fewer classification errors.

Step 2 : Write Usable Customs Descriptions

A marketing name is not a customs description. "Summer Cloud Tee" tells a customs officer nothing; "Cotton t-shirt" does. The description must state what the goods physically are.

• Store a clear, factual description for each product, separate from your listing title.
• Customs scrutiny has been stricter since July 2026: vague descriptions are the first to cause hold-ups.

Step 3 : Declare the Correct Origin

A classic trap: shipping from a country is not the same as manufacturing there. A product made in China and stored in a UK warehouse remains Chinese-origin for customs purposes and will not benefit from any EU-UK preferential treatment.

• Declare the actual country of manufacture, using the two-letter ISO code (CN for China, GB for the UK).
• Origin is document-backed and verifiable: never declare a more favourable origin than the reality.

Step 4 : Register for IOSS and Know Who the Declarant Is

This is the most structurally significant change, and the most misunderstood.

IOSS handles VAT, not the €3 duty. A seller who thinks they are "covered" by having an IOSS number is wrong: IOSS lets you collect VAT at checkout and smooth customs passage (the "green channel"), but the €3 duty is a separate obligation.

The IOSS holder becomes the primary customs debtor. The new framework establishes a liability chain: the IOSS holder (often the seller or marketplace), then their indirect representative, then an import representative, and only as a last resort another declarant (carrier or destination postal operator). That last party rarely accepts the liability: without a designated declarant in place upfront, many parcels are returned to sender. No declarant, no clearance.

Action items:

• If you are not yet IOSS-registered, do it now. A non-EU seller without an EU establishment must go through an IOSS intermediary.
• Pass your correct IOSS number to your carriers on every eligible shipment.
• If you sell through a marketplace, verify who carries the customs liability and that its systems transmit the right data.
• Prepare your identity information: name, address, EORI number, VAT number, and determine whether an EU-established entity can act as importer.

Step 5 : Prepare Product Identifiers (PIDs)

From 1 November 2026, new product identifiers become mandatory (voluntarily declarable from 1 July 2026). For each product in a shipment of €150 or less, three identifiers will be required:

• A merchant identifier: the internal code you use for the product (your SKU or item reference).
• A non-standardised manufacturer identifier: a code assigned by the manufacturer or supplier to that specific product.
• A standardised manufacturer identifier: where one exists, an industry-standard code such as a barcode, identical regardless of retailer.

The advice: start mapping these identifiers in your catalogue now. Clean data today puts you ahead of the November deadline rather than scrambling to catch up.

Step 6 : Send Complete Electronic Data Before the Parcel

The golden rule of the reform: data precedes the parcel. Electronic declarations (CN22, CN23, commercial invoice) must be complete and accurate before the goods arrive.

For a shipment from a third country to an EU consumer, carriers typically require five elements:

• the HS code (often 8 digits);
• the country of origin;
• a plain-language description of the goods;
• the declared value of the item (excluding VAT for IOSS shipments);
• your EORI or VAT number.

Incomplete HS codes, a missing origin, or a vague description are precisely what triggers hold-ups, multiplied duty lines, and charges billed to the recipient.

ParcelRush automatically generates CN22, CN23, and the commercial invoice on every label, pulling from the product data you have already entered: your electronic declarations go out complete, with no manual re-entry.

Step 7 : Choose the Right Billing Structure (DDP Rather Than DAP)

The €3 duty is a customs debt owed by the declarant, not a charge the courier collects at the door. You need to decide, market by market, who pays what.

• Under DDP / "Duties and Taxes Paid", you (or the seller) settle duties and taxes upfront, and the customer is not contacted at delivery. This is the recommended model for preserving the customer experience.
• Under DAP / DDU, the recipient risks being chased for payment, often with additional carrier handling fees.

Align your checkout and carrier configuration with the chosen model and stay consistent: variable treatment confuses customers and hurts conversion.

One thing to flag: from July 2026, duty refunds for B2C returns of €150 or less are no longer available, regardless of whether the shipment cleared under H7 or H1 procedure. Factor this into your returns policy.

Step 8 : Pack Your Parcels Smartly

Because the duty applies per tariff category and not per unit, what goes in the box changes the bill.

• A parcel of 10 identical items under the same tariff heading owes only one €3 duty.
• A parcel mixing several categories is taxed per category.

Grouping by identical SKU therefore reduces cost. Be aware, however, of the anti-abuse clause (Article 243(5) of the UCC implementing act): artificially splitting shipments to stay under a threshold is regulated. Optimising is fine; circumventing is not.

Step 9 : Recalculate Your Margins and Pricing

The flat fee is regressive: €3 on a €5 item is a 60% surcharge, versus 3% on a €100 item. The assumption that "low value = no duty" no longer holds.

• Model your landed cost assuming a duty applies to every B2C parcel under €150, and include the expected handling fees (EU-level and, where applicable, national fees such as France's €2 TPC).
• Decide whether to absorb the cost or pass it through at checkout, and be transparent about it.
• At sufficient volume, evaluate EU-based stock: bulk importing then shipping locally quickly becomes more cost-effective than direct-to-consumer from a third country.

Key Dates to Keep in Mind

FAQ

Does IOSS exempt me from the €3 duty?

No. IOSS covers VAT. The €3 duty is a separate customs obligation owed by the declarant, even for IOSS-registered shipments.

Is the duty per item or per parcel?

Per tariff subheading within the parcel. Multiple units of the same product trigger only one €3 duty; products from different tariff categories are taxed separately.

Is there an exemption for small businesses?

No. The duty applies based on value (≤ €150) and the e-commerce flow from a third country, with no turnover threshold or waiver for small sellers.

Am I affected if I ship from within the EU to EU customers?

No. The duty only targets imports from third countries. Your intra-EU shipments are not affected.

What happens if no declarant is designated?

The destination postal operator can, as a last resort, become the customs debtor, but most refuse this liability: the parcel is then typically returned to sender. Without a designated declarant arranged upfront, your parcels will not clear.

ParcelRush and Customs Compliance

Whether you sell on Shopify, WooCommerce, Squarespace, or across multiple platforms at once, ParcelRush automatically generates CN22, CN23, and commercial invoices on every label, and embeds your IOSS number directly in your shipping documents. With DHL, UPS, and FedEx, customs data is transmitted via paperless trade: no physical document to attach to the parcel. For other integrated carriers such as DPD, the documents are generated ready to print and stick on. Either way, your HS codes, descriptions, and country of origin travel with the shipment, no manual re-entry.

Automate your customs documents with ParcelRush

Further Reading

• To understand why this regulation exists and who it hits hardest: EU €3 Customs Duty: The Anti-Shein Reform That's Also Hitting Small E-Commerce Sellers.
• To find and verify your HS/HTS codes product by product: HS & HTS Codes: Avoid Customs Delays.
• For the fundamentals of international customs clearance (CN22/CN23, incoterms, EORI): International Shipping: The Customs Rules for Your E-Commerce.
• To choose a carrier suited to your destinations and DDP delivery: Choosing the Right Carrier for Your E-Commerce Business.
• To automate your customs documents on every label: International Shipping.

Sources

• European Commission, EU Customs Reform : taxation-customs.ec.europa.eu
• European Commission, Guidance and legal text on temporary flat fee on low-value imports (8 June 2026) : taxation-customs.ec.europa.eu
• Council of the EU, Council gives final green light to new customs duty rules for small parcels (11 February 2026) : consilium.europa.eu
• Regulation (EU) 2026/382 : eur-lex.europa.eu