July 1 has passed. Here's what you need to know now.
The EU's €3 customs duty on low-value parcels went into effect July 1, 2026. The first week shows clear patterns: declaration strategy matters more than expected, checkout complexity is higher than most brands calculated, and the routing decisions you make now determine whether you absorb this cost or pass it along.
This guide covers what's happening, why the details matter, and exactly how to configure your shipping to minimize impact.
I wrote about the broader regulatory shift for Global Trade Magazine. The article focuses on what ecommerce retailers need to do now.
~ Alison Layfield
The core rule: who pays the €3 duty
The answer depends on your service choice and IOSS registration status.
If you're using DDP or IOSS:
You (the shipper) pay the €3 duty upfront. The cost is baked into the landed cost shown at checkout. This protects customers from surprise fees and gives you pricing control.
If you're using DDU (non-IOSS):
The recipient gets billed the €3 duty at delivery. This creates surprise fees, customer support tickets, and the chargeback risk that made DDU unreliable long before July 1.
If you're using DDU with USPS services and have an IOSS number on file:
This is a problem. USPS routes through postal operators, who don't handle IOSS properly yet. ePost gets charged the €3 duty, which then gets billed back to you. You're paying for the handling without the benefit of customer protection.
Our recommendation: If you're IOSS registered, use ePost Global's proprietary services. If you continue with USPS services, any additional fees charged to ePost Global will be invoiced to your account.
The declaration strategy that changes your math: H7 vs H1
This is where most brands get the calculation wrong.
The difference between H7 and H1 declaration determines how many times the €3 duty applies to a single order.
H7 Declaration (HS6 Level)
Items with the same price and description get grouped on one line, with quantity increasing. You pay one €3 duty per line.
Example: A customer orders 3 identical t-shirts (same color, size, price). They appear as one line item. Cost: €3 total duty.
H1 Declaration (HS10 Level)
Each item appears on a separate line based on HS10 classification. You pay €3 per line.
Example: A customer orders 2 cotton t-shirts and 1 linen shirt. Three separate lines. Cost: €9 total duty (€3 per line).
Why This Matters
A five-item order spanning five different HS codes costs €15 in duty using H1 declaration. Using H7 declaration at HS6 level, the same order might cost €6 to €9 depending on how many distinct HS6 categories the items fall into.
For high-volume sellers shipping multi-item orders, declaration strategy directly impacts whether this fee is a 2% margin pressure or a 5% margin crisis.
What To Do Now
Audit how your system currently declares items. If you're using H1 (individual line items), model the cost impact of consolidating to H7 (grouping by HS6 category). The difference can be substantial.
Three shipping options. Which one works for you.
Option 1: DDP Using ePost Global Proprietary Services
You register for IOSS, prepay duties at checkout, handle VAT compliance. Customers see the full landed cost upfront. No surprises.
Who this works for: Brands focused on customer experience, high-value products, or sellers who want pricing control.
Option 2: DDP Using ePost Global's UK Customs Broker (Non-IOSS Registered)
You're not IOSS registered, but you want DDP protection. ePost can provide IOSS through our UK customs broker. We pay duty and VAT at import. You get billed like a standard DDP shipment. This option is newly available as of July 1, 2026.
Who this works for: Brands who want DDP benefits without managing IOSS registration themselves.
What you need to know: This is a new service. Process details and full implementation timeline are being finalized. Contact your ePost account team for specific details on onboarding and billing.
Option 3: DDU (For Specific Scenarios Only)
Recipients pay the fee at delivery. This creates friction, support tickets, and chargeback risk.
When this makes sense: Postal-only services where DDP isn't an option, or ultra-low-value items where the duty exceeds product value.
When to avoid: Any scenario where customer experience matters or where you care about delivery success rates.
Important: Commodity restrictions when moving from USPS to Proprietary Services
Not all products can clear customs under commercial channels.
Prohibited/Restricted commodities include:
Seeds, animal products, food items, and other categories that require specific customs treatment.
Before migrating from USPS to ePost Global's proprietary services, verify that your product mix doesn't fall into restricted categories. If you ship seeds, food, or animal-derived products, DDU postal routing may remain your only option, and the fee will apply to recipients.
First 30 days: implementation checklist
Week 1: Audit your current setup
Confirm which declaration method your system uses (H7 or H1). Model the cost difference on your five most common order types. Assess your IOSS registration status.
Week 2: Update your landed cost modeling
Recalculate landed costs using H7 declaration (if applicable). Layer in the €3 duty. Factor in national fees already active in France (€2) and Romania (€5) if applicable. Update pricing strategy and checkout display.
Week 3: Test checkout and billing
Verify that duty appears as a distinct line item at checkout. Test across single-item and multi-item orders. Confirm billing accuracy on your ePost invoices.
Week 4: Customer communication
Draft FAQ content explaining the new fee and what it means. Prepare messaging for support staff handling questions about surprise fees on older orders that shipped pre-July 1 but arrived post-July 1.
Common questions after July 1
Q: What's the difference between H7 and H1 declaration?
A: H7 declaration at the HS6 level allows items with the same price and description to be grouped on one line, with quantity increasing. This means a single €3 duty applies to that line. H1 declaration at the HS10 level presents items on separate lines, so the €3 duty applies to each line. Example: 2 identical items on one line (H7) = €3 total. 2 identical items on separate lines (H1) = €6 total.
Q: Can we move from USPS to ePost Global's proprietary services? What do we need to do?
A: Yes. Verify that your commodities are not problematic for commercial clearance. Prohibited or restricted items (seeds, animal products, food items, etc.) may not qualify. If your product mix clears, contact your ePost account team to configure proprietary service routing. Turnaround is typically same-day for standard product categories.
Q: Do you have IOSS available for customers not currently IOSS registered?
A: Yes. If you want DDP services and are not IOSS registered, we can provide IOSS through our UK customs broker and will pay duty and VAT at time of import. We bill you as we typically do in a DDP scenario. This option is newly available as of July 1, 2026.
Q: What happens if we request DDU service (non-USPS) while IOSS is on file?
A: ePost routes all DDU shipments through our proprietary services as usual. You get charged the €3 duty, which is then billed back to your account.
Q: What happens if we request DDU via USPS-specific services (USPS IPA, ePacket, PMI, PMEI) while we have an IOSS number on file?
A: ePost routes via USPS and charges the €3 duty to your account. It is currently unknown how receiving postal operators will manage the payment. While DDU routings remain available via postal channels (meaning the consignee pays the €3 fee), this only applies if no IOSS number is included in the data.
Q: What's your recommendation?
A: If you are IOSS registered, we strongly recommend utilizing ePost Global's proprietary services. If you choose to continue using USPS services, please be advised that any additional fees charged to ePost Global will be invoiced to your account.
What's Coming Next
The €3 duty is the visible pressure. The structural pressure is consolidation: Global-e acquiring Passport means fewer independent routing options. Platform integration means your logistics independence is contracting. Regulatory complexity means the next rule change will hit faster than you expect.
The brands absorbing July 1 without losing margin are the ones that moved from single-strategy shipping to flexible multi-option programs before the pressure hit.
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