EU looks to stop tax-free rule on packages under 150 euros starting in 2026; Shein and Temu could take a hit

Finance officials from European Union countries made a deal Thursday to start charging customs fees on cheap imported packages two years sooner than expected. The target? Chinese shopping sites Shein and Temu.

Ministers meeting in Brussels want the new tax rules ready by 2026. The European Parliament still has to sign off on it first. EU leaders are in a hurry because cheap Chinese products keep pouring into European markets.

Trade Commissioner Maros Sefcovic told ministers to drop the “de minimis” rule that lets online shoppers skip taxes on purchases under 150 euros ($175). He wants it gone by the first quarter of 2026 and replaced with a “simplified temporary customs fee.”

The European Commission first talked about scrapping this tax break in 2023, but back then, they said 2028. That fits with their bigger plan to overhaul EU customs. Sites like Shein, Temu, AliExpress, and Amazon Haul send clothes, accessories, and gadgets straight from Chinese factories to shoppers at rock-bottom prices. They can do this because of the tax waiver.

European businesses like what they’re hearing

Sefcovic wrote that “European industries, particularly retailers, have repeatedly underlined that this distortion of competition be removed without delay.”

Government people and business groups across Europe are happy about this. Denmark’s economy minister Stephanie Lose told reporters that “ending the exemption will close long-standing loopholes that have been systematically been exploited to avoid customs duties.”

German online seller Zalando has been pushing EU officials to do something. They put out a statement wanting fast action on removing the exemption. Sweden’s retail group and Germany’s e-commerce association both said the ministers’ decision is a first step toward making things more fair.

Luca Sburlati runs Italy’s fashion lobby Confindustria Moda. He said taxing packages worth less than 150 euros is “essential for the survival of our textile and clothing sector.”

Countries making their own rules

Things are getting urgent because individual EU countries have started making their own charges. Romania wants a 25 lei ($5.73) fee on cheap packages. Italy’s industry minister said Wednesday they’re working on a tax before the year ends to protect fashion makers.

European retailers and wholesalers’ group EuroCommerce warned that different national fees could hurt the EU single market. The Commission pitched a 2 euro fee, but nobody knows when that would start.

People aren’t sure if these fees will actually change anything. The CEO of Poste Italiane handles millions of packages every year. He said Thursday that “usually the market readjusts … One or two euros will not really change the attractiveness of those platforms.”

Alexandre Bompard heads France’s retail association and runs Carrefour supermarkets. He said back in July that a 2 euro fee on cheap parcels was “a joke.”

This happens while there are bigger trade fights between the EU and China going on. Companies like Temu are already taking hits from changing trade rules around the world.

Get $50 free to trade crypto when you sign up to Bybit now