EU Commission Clarifies VAT on EUR 3 Customs Duty for Low-Value Imports

The EU Commission clarified that from 1 July 2026 the new EUR 3 customs duty on low-value imports will not be subject to VAT when imports use IOSS.
Under IOSS, VAT is collected at the time of sale, before the customs duty arises, so the EUR 3 charge is excluded from the VAT base.
Under the Special Arrangements and the normal import procedure, VAT is charged at importation, so the EUR 3 customs duty is included in the VAT taxable amount.
The proposed Union handling fee (expected no earlier than November 2026) will be outside the scope of VAT and not part of the import VAT base.
Overall, IOSS gets more favorable treatment than the other import procedures.

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.