The European Union’s balancing act: Simpler rules and higher costs
The European Union’s balancing act: Simpler rules and higher costs
The European Union’s (EU) latest customs reforms bring a mixed outcome for Australian businesses trading with the EU.
On one hand, the recently released provisional text of the Australia-EU Free Trade Agreement (A-EU FTA) proposes simplified origin requirements and reduced administrative burden to claim preferential tariff treatment. On the other, the EU will remove its customs duty exemption for low-value imports, meaning all goods entering the EU, regardless of value, will be subject to customs duties, unless they are otherwise duty free.
Together, these changes mean businesses will need to reassess both cost exposure and compliance strategies for EU trade.
EU low-value import reforms
The end of de minimus relief
From 1 July 2026, the EU will abolish its ‘de minimus’ threshold for low-value goods.
This means that all goods entering the EU, regardless of value, will be subject to customs duties - more consignments will require full customs treatment, increasing the administrative burden on customs brokers and forwarders.
Removal of the duty-free threshold will also increase landed costs for low-value shipments - sellers may need to revisit pricing and delivery terms to accommodate new duty structures.
Value-added tax (VAT) treatment remains unchanged, with all imports continuing to be subject to VAT.
New duty treatment under Import One Stop Shop (IOSS)
Under the new reforms, low‑value consignments under EUR 150 declared through the Import One Stop Shop (IOSS) scheme will attract EUR 3 customs duty per item, while non‑IOSS shipments will be subject to standard customs duties based on the tariff classification of the goods.
Businesses may need to assess IOSS registration to manage customs duty exposure.
Simpler origin claims
Statements of origin
Rather than relying on traditional certificates of origin, the provisional text of the A-EU FTA proposes a statement of origin model for preference claim.
A statement of origin:
- Is made directly by the exporter
- Is included on a commercial document such as an invoice, packing list or delivery note
- Does not require validation by a government authority, chamber of commerce, or customs office; and
- Does not require prior issuance, stamping, or certification.
This significantly reduces compliance costs, administrative burden and delays at the border.
Waiver for low-value imports
The provisional text also proposes a waiver of formal origin documentation requirements for certain low-value imports provided the goods qualify as originating and customs has no reason to doubt the claim.
- For imports into the EU, the waiver applies to:
- Small packages between private individuals valued at or below EUR 500
- Travellers’ personal luggage valued at or below EUR 1,200
- For imports into Australia, Australian customs law already does not require origin documentation where the customs value is at or below AUD 1,000.
Key takeaways
The removal of de minimus is a clear increase in customs duty exposure for low-value imports into the EU. However, the A-EU FTA helps offset this impact by making preferential tariff treatment easier to claim through simplified origin rules and reduced documentary requirements.
The EU may be removing the easy duty exemption – but it is also offering a more practical pathway to duty relief for those prepared to use it.
How BDO can help
Australian companies should act now to get advice on maximising the upcoming opportunities available under the A-EU FTA.
BDO’s international trade and customs experts can assist by providing strategic guidance to help businesses adjust and stay competitive in a rapidly evolving global trade environment.
Contact us today to learn more about how we can support your business.
