In May 2023, the European Commission published its proposal for the reform of the EU Customs Union, which includes the removal of the long-standing import duty de minimis exemption. The de minimis threshold, currently set at EUR 150, allows items below this value to be shipped into the EU without customs duty liability. The proposed reform would reduce this threshold to zero, impacting e-commerce markets, logistics processes, and EU consumers.
The European Commission’s Impact Assessment does not present a point-by-point, specific analysis of the different measures included in the reform. Instead, it considers the aggregate effects of multiple policy changes. Our study zooms in on the specific proposal to remove the de minimis threshold and evaluates the impact of removing the customs de minimis.
The research finds that removing the de minimis threshold could increase complexity and costs for business operators and customs authorities and that the Impact Assessment lacks a comprehensive analysis, including key elements of effective tax design, such as tax efficiency and incidence.
We estimate the isolated effect of the de minimis removal could potentially cause a EUR 2.3 billion increase in the compliance cost for businesses and customs authorities, assuming everything else remains unchanged. These costs could ultimately fall on EU consumers, potentially increasing annual prices by EUR 62 per online shopper.
The report also highlights that the removal of the de minimis threshold does not directly contribute to the important goals of the reform, including strengthening consumer protection. Moreover, we emphasise that the Impact Assessment does not factor in potential delays in the IT upgrade’s implementation and the associated simplification measures, which could ultimately affect the effectiveness of the reform.
This report contributes to the debate surrounding the removal of the de minimis threshold. The findings of this report provide valuable insights for policymakers and industry leaders on the potential impact of removing the de minimis threshold on EU businesses and consumers. It underscores the importance for policymakers to conduct further analysis and research before considering the elimination of this trade facilitation measure, highlighting critical areas that need to be addressed to fully understand the implications of such a policy change.
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