Navigating the new EU customs rules as an e-commerce brand

The European Union is undergoing the most significant overhaul of its customs regulations in decades, with sweeping changes specifically targeting the explosive growth of e-commerce. 

These comprehensive reforms represent a direct response to what officials describe as the ‘exponential’ increase in online commerce and the resulting surge in customs declarations flooding EU borders daily. From VAT collection mechanisms to cross-border return processes, virtually every aspect of international e-commerce operations will be affected by these landmark changes. 

This article outlines the critical regulatory shifts that will take effect throughout 2025 and beyond, providing you and your e-commerce brand with essential guidance on navigating this transformed landscape successfully.

New EU customs laws taking effect in 2025

There is no single law taking effect this year or in the near future across the EU that impacts e-commerce brands. Rather, it’s a series of interlinked and overlapping policies, laws, and regulations that need to be navigated moving forward.

A surge in e-commerce imports

The numbers driving these reforms are staggering, painting a clear picture of why change became inevitable. In 2024, approximately 4.6 billion low-value consignments worth €150 ($175) or less flooded EU markets, translating to an overwhelming 12 million parcels arriving daily. This represents more than double the volume recorded in 2023 and a fourfold increase compared to 2022 levels. The scale of this transformation has fundamentally challenged existing customs infrastructure and regulatory frameworks.

The problem is particularly acute with very low-priced products, with over 90% of all e-commerce shipments under €150 originating from China. Major platforms like Temu and Shein have experienced what regulators term ‘exponential’ growth, becoming central figures in the new legislative framework. This unprecedented surge has created significant challenges that extend far beyond simple processing capacity.

The influx has introduced substantial risks to EU markets, including dangerous, counterfeit, or non-compliant products that pose serious safety and health risks to consumers. The environmental impact has become equally concerning, with unsustainable shipping practices contributing to pollution and overwhelming recycling systems with low-quality or toxic products. Additionally, legitimate businesses face increasing unfair competition from entities that exploit regulatory gaps and take advantage of duty exemptions.

The EU’s comprehensive response aims to restore fair competition across the marketplace, enhance product safety standards, and provide greater transparency and predictability in customs clearance processes. These reforms represent a fundamental shift from reactive border management to proactive, data-driven customs control.

Key elements of the new union customs code and related reforms

The cornerstone of the reform package is the complete abolition of the €150 duty-free exemption, which has been systematically exploited by fraudsters. Up to 65% of such parcels entering the EU are currently undervalued to avoid customs duties on import. Beginning March 1, 2028, all goods imported into the EU will be subject to customs duties, regardless of value, thereby eliminating a loophole that has distorted competition for years.

Perhaps the most transformative change involves shifting responsibility directly to online platforms themselves. Rather than placing the compliance burden on individual consumers or carriers, platforms will become directly accountable for customs compliance, including collecting both customs duties and VAT at the point of purchase. This fundamental restructuring of accountability represents a seismic shift in how cross-border e-commerce operates.

In June, the EU adopted its negotiating mandate to reform the Customs Union, accelerating efforts to modernise customs procedures. Central to this modernization is the establishment of the European Customs Authority (EUCA) and the revolutionary EU Customs Data Hub. 

In the reformed EU Customs Union, businesses seeking to import goods into the EU will be able to log all information on their products and supply chains into a single online environment: the new EU Customs Data Hub. This centralized platform will replace fragmented national IT systems, potentially saving Member States up to €2 billion ($2.3327 billion) annually while dramatically simplifying cross-border trade processes.

The reform introduces significant simplification measures, reducing the current thousands of customs duty categories to just four streamlined classifications. This simplification becomes crucial given the massive increase in taxable low-value goods. Additionally, a new non-discriminatory handling fee will be implemented for mass e-commerce shipments directly to consumers, designed to strengthen customs oversight and combat unfair competition.

Enhanced market surveillance represents another critical pillar, with the EU prioritizing controls on products presenting significant safety hazards and compliance risks. This includes coordinated actions between customs and market surveillance authorities, ensuring comprehensive oversight of product safety.

The VAT in a Digital Age (ViDA) initiative, which took effect on March 11, 2025, complements these customs reforms by simplifying VAT processes through digital reporting, e-invoicing, and a single VAT registration system. Under the new rules, a wider number of suppliers selling goods worth up to €150 will be responsible for paying import VAT. 

ViDA extends the One Stop Shop (OSS) process, enabling businesses to declare and pay VAT for all EU members through a single electronic portal, dramatically reducing administrative complexity across multiple territories.

What the new laws mean for e-commerce brands

These new laws will have several distinct effects on how e-commerce brands can operate when selling to EU member states, whether they are European brands or not.

Increased accountability and legal liability

The regulatory transformation fundamentally shifts accountability in unprecedented ways. Online marketplaces, including Temu, Shein, and Amazon, will be held directly accountable for hazardous or illegal products sold through their platforms. This represents a dramatic departure from previous models where liability was diffused across multiple parties. The compliance burden now rests squarely with platforms themselves, requiring comprehensive systems to ensure all goods adhere to EU customs obligations and providing detailed data before goods arrive at borders.

This shift has already generated significant regulatory scrutiny, with the EU initiating legal action against Temu due to concerns about the sale of unauthorized or illegal products. Similar investigations are underway regarding Shein and Amazon, signaling that enforcement will be swift and substantial.

Significant financial and operational shifts

The financial implications are far-reaching and require immediate strategic attention. Abolishing the €150 threshold will ensure that all imported goods are subject to customs duties. This elimination means that every imported item will face customs duties, regardless of its value, forcing brands to adjust their pricing strategies and profit margins. The proposed handling fee introduces an additional cost layer that must be factored into operational planning.

Perhaps most significantly, online platforms become responsible for collecting customs duties and VAT at the point of purchase. While this eliminates hidden charges and unexpected paperwork for consumers upon delivery, it creates substantial new obligations for businesses. Companies must review their entire e-commerce infrastructure to determine whether current ERP systems can handle upfront duty and VAT collection requirements.

The requirement to submit comprehensive product and supply chain data to the EU Customs Data Hub necessitates integration with the new centralized online system. The implementation of a Data-Driven Customs System replaces traditional declarations, utilizing advanced data analytics for import supervision, and enables smarter and more efficient customs controls. While this promises reduced administrative burdens and expedited clearance, it requires significant system upgrades and process restructuring.

Reshaping the competitive landscape

These reforms specifically address the advantages previously enjoyed by foreign companies exploiting duty-free status, creating a more level playing field for EU businesses. The changes promise enhanced consumer protection against unsafe products and unfair practices, while addressing environmental concerns related to mass shipping, including pollution from production and transportation, as well as challenges to recycling systems.

The transformation creates opportunities for legitimate businesses to compete more fairly while raising barriers for entities that previously relied on regulatory arbitrage to maintain artificially low prices.

How to navigate these new laws as an e-commerce brand

Understanding the impacts of the new laws is just the start. You’ll need a plan in place to navigate the various new laws and regulations.

Proactive preparation is key

Success in this new regulatory environment demands immediate strategic planning. Proactive preparation extends beyond mere compliance and becomes a competitive necessity for securing a position in the evolving European e-commerce landscape. Brands must conduct comprehensive assessments of their current processes, identifying areas that require adjustment well in advance of implementation deadlines.

Critical to this preparation is clarifying who serves as the ‘importer of record’ for EU sales. If the brand itself holds this responsibility, substantial internal changes are inevitable. If marketplace partners assume this role, ensuring their readiness while aligning internal processes becomes essential for seamless transitions. 

Ensuring you have the proper documentation will be important. While English remains the primary business language in the EU, its prevalence is in decline. Having a means to produce automatically translated documents for navigating multi-lingual customs checks could be essential.

Adjust financial and operational models

Since all imported goods will incur customs duties, brands must immediately begin adjusting pricing strategies and profit margins to accommodate these new costs. This requires sophisticated financial modeling to maintain competitiveness while absorbing additional expenses.

Conducting thorough reviews of existing e-commerce setups and supply chains becomes non-negotiable. Most critically, companies must assess whether current ERP systems can handle upfront duty and VAT collection at the point of purchase. This technical evaluation often reveals the need for substantial system upgrades or replacements.

Embracing digital transformation through the new EU Customs Data Hub offers significant advantages for forward-thinking companies. This system allows businesses to submit product and supply chain information into a single online environment for multiple consignments, dramatically reducing the administrative burden once fully implemented.

Leverage simplification and ensure compliance

For VAT compliance, leveraging the expanded OSS process under ViDA offers immediate benefits. This system enables businesses to declare and pay VAT for all EU members through a single electronic portal, allowing them to register in one EU jurisdiction to cover all EU trade. This simplification reduces administrative burden while ensuring comprehensive compliance.

With increased scrutiny on product safety, brands must prioritize ensuring all products comply with EU safety and regulatory standards. This prevents significant hazards, avoids non-compliance issues, and protects against potential legal actions that could severely impact business operations.

Given the complexity of these reforms, seeking expert guidance becomes increasingly valuable. The changes represent a big shift, where compliance challenges can still emerge despite careful preparation. Consulting with specialists in global indirect tax compliance helps evaluate exposure and design future-proof VAT strategies while ensuring correct treatment and optimized customs procedures.

Make sure your company is ready for the EU customs reforms

The EU’s customs reforms mark a pivotal transformation in international e-commerce, bringing both significant compliance challenges and opportunities for streamlined operations and fairer competition. These changes fundamentally reshape how cross-border commerce operates within European markets, requiring immediate attention from all e-commerce businesses regardless of size or market position.

E-commerce brands that proactively understand, adapt to, and leverage these new regulations will be best positioned for success in the evolving European market. Early compliance can help you avoid penalties and position your company as a leader in innovation. The companies that view these regulatory changes as positive transformation catalysts rather than business obstacles will emerge strongest in this new competitive landscape.