How to Handle Customs and Duties on EU Orders from Shopify

Who it is for

US stores selling to EU customers

Time needed

2 to 4 hours, longer for a big catalog

What you need

HS codes, product origins and a DDP carrier

On 1 July 2026, the EU stopped letting low-value parcels in duty-free. Until then, a US store could send a $60 order to Germany and the customer paid VAT but no customs duty. Now every parcel to an EU consumer carries duty, and Shopify's customs documentation also asks for a product identifier for each item on EU parcels worth €150 or less. If your EU orders were set up before this summer, they almost certainly need another look.

This guide explains what applies to EU orders now, the four ways to handle it from a Shopify store, and how to set up Shopify's duties and import taxes feature step by step. Rules and fees come from the European Commission and Shopify's help center, as checked on 7 November 2026. I'm a Shopify developer, not a customs broker or tax adviser, so check your own products with one before you rely on any rate.

What an EU order owes now

Two separate charges apply to goods imported into the EU: VAT and customs duty. Which ones apply, and who pays them, depends on the order value.

The €3 duty applies per declaration line, not per parcel, regardless of how many items are on that line. How items group into lines depends on the customs declaration type. The European Commission's own example is an order with three products that, on a declaration needing 10-digit codes, makes three lines and €9 of duty. The duty applies whichever VAT scheme you use, including IOSS, and the Commission says splitting or grouping consignments to lower it is subject to anti-abuse checks.

The Commission also described a separate handling fee for customs processing, with a deadline of 1 November 2026. Its details weren't published on the page I checked, so look it up before you set prices for 2027.

Four ways to handle duties from Shopify

Duties at checkout (DDP). Shopify estimates duties and import taxes from each product's HS code and origin, and the customer pays them with the order. You then ship with a delivered duty paid label so the carrier doesn't charge the customer again. This gives EU shoppers a final price, which is what they expect from EU stores.

IOSS. The EU's Import One-Stop Shop lets a non-EU seller collect VAT at checkout on orders up to €150 and file it in one place. A seller based outside the EU, like a US store, has to appoint an intermediary established in the EU. In Shopify you enter the IOSS number in your EU tax settings. IOSS covers VAT only, not duty, and Shopify doesn't let IOSS and the duties feature both run at checkout: if you activate duties for the EU, the duties feature manages all taxes on EU orders.

Delivered at place (DAP). You do nothing at checkout, and the carrier collects VAT and duty from the customer before delivery, and may add its own fee. It's the cheapest to set up and the worst experience. Use it only for occasional orders, and say so clearly.

Managed Markets. With Shopify's Managed Markets, Global-e becomes the merchant of record and handles tax, duties and local payment methods. It's available to merchants based in the continental US, and to certain stores in Canada and the UK.

Step by step: collect duties at checkout

Check the limits first, because they decide whether this route works for you:

• You can't collect duties in a Rest of world zone, so EU countries need their own zone or market.
• If you buy labels, your carrier must support DDP labels. From the US, DHL Express Worldwide in Shopify Shipping supports both DDP and DAP, to over 220 countries and territories.
• It doesn't work with the Shopify Fulfillment Network app, tax overrides or manual tax rates, and some checkout customizations can conflict.
• You can't offer DDP and DAP to customers in the same country.

1. Open the settings. Go to Settings > Taxes and duties. You can also reach them through Markets.
2. Start setup. In the Duties and import taxes section, click Set up.
3. Confirm your carriers. Check that your carriers and any third-party apps support delivered duty paid.
4. Choose countries. Select the EU countries or regions where you'll collect duties and import taxes.
5. Fill product data. Add any missing HS codes and countries of origin. Shopify lists the products that need them.
6. Update policy and notifications. Say in your shipping policy that duties are included at checkout, and check the order emails.
7. Activate. Review the terms and click Agree and activate.

Step by step: add HS codes and origin

Duty is calculated from each product's HS code and country or region of origin. Without an HS code, Shopify falls back to the product description or category, which is less accurate. Shopify warns that missing or wrong data might mean extra duties charged to the customer on delivery.

1. On a product: in the Shipping section, check Physical product is on, set Country of origin and enter the Harmonized System (HS) code.
2. In bulk: open the bulk editor and add the Harmonized system code and Country of origin columns.
3. By CSV: go to Settings > Taxes and duties > Duties and import taxes > Manage, then Update with CSV in the product information section.
4. Weights too: keep product weights accurate. Some destinations need weight for duty, and customs data needs it anyway.

HS codes are usually six digits worldwide, and the EU uses longer codes. Shopify uses a country-specific code when one exists. For anything unclear, such as gift sets or products made from mixed materials, ask a customs broker. A wrong code is one way a "duty-paid" parcel still ends up with a bill at the door.

Ship it: DDP labels and paperwork

1. Set preferred carriers to ones that support DDP.
2. Buy the label from the order with Create shipping label. Check the customs information for each item under Edit customs information.
3. Print what's needed. For destinations where the carrier submits customs data electronically, you print only the label. Otherwise print the customs form, and keep a commercial invoice ready.
4. Watch your bill. DDP labels are charged like other labels. If customs adjusts the duty, the change shows on your Shopify bill as a Duties adjustment.

The customs data for each item needs an HS code of at least six digits, the country of origin, a description, quantity, value and weight, plus a product identifier for EU parcels worth €150 or less.

Price it into your store

Once duties show at checkout, EU customers see a higher total than before July. You have two choices: show duties as a separate line, or absorb them into EU prices so the product price is the final price. A €3 duty on a low-price item is a large share of the order, so check your EU margins with the profit margin calculator, and remember the 2% or 1.5% currency conversion fee if EU customers pay in their local currency. The full list of international fees is in what it costs to sell internationally on Shopify.

Common mistakes

• Still treating sub-€150 parcels as duty-free. That changed on 1 July 2026.
• Running IOSS and assuming it covers duty. It covers VAT only.
• EU countries left in Rest of world, where duties can't be collected.
• Collecting duties, then shipping with a DAP label, so the customer pays twice.
• Guessing HS codes. The code sets the duty and the customs description.
• No word on the site. Whatever route you choose, explain it in the shipping policy and near the price.

EU customs checklist

1. Route chosen: duties at checkout, IOSS, DAP or Managed Markets.
2. EU countries in their own market and zone.
3. HS code, origin and weight on every product shipped to the EU.
4. Product identifiers included in customs data for sub-€150 parcels.
5. DDP-capable carrier set as preferred, if collecting duties.
6. Duties activated under Settings > Taxes and duties, or IOSS number entered, not both.
7. Shipping policy and order emails updated.
8. EU margins rechecked with duty and fees included.
9. Test order to an EU address, checking the duty line and the label.

Next steps

Start with product data: HS codes and origins on everything you ship to the EU. Then choose your route and test it with a real order. If you're setting up EU selling from scratch, my international shipping guide covers markets, zones and carriers, and Shopify Markets vs multiple stores helps if you're thinking about a separate EU store.

I can check your duties setup and product data for free as part of a store review. If you need HS codes and origins added across a large catalog, that's part of my store development work, which starts from $300.

Frequently asked questions

Sources

1. EU applies €3 customs duty per item on low-value e-commerce consignments, European Commission
2. EU VAT One Stop Shop (OSS), Your Europe
3. Collecting duties and import taxes at checkout, Shopify Help Center
4. Considerations for duties and import taxes, Shopify Help Center
5. Migrating EU tax settings, Shopify Help Center
6. Customs documentation, Shopify Help Center

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Written by Ashraf Siddik

I'm a Shopify developer and CRO specialist. I have built and improved Shopify stores since 2018, completed more than 1,000 projects, and hold a 4.96 average rating across 719 client reviews.

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