EU imposes additional taxes on small parcels entering the country, raising annual fiscal revenue by 6 billion euros

(Deutsche Welle Chinese website) An internal European Commission document reviewed by Reuters on October 30 showed that the tax on small parcels imported by e-commerce is expected to bring about 6 billion euros in fiscal revenue to the EU every year. The import tax on this small package has just started to be levied on July 1 this year, and it is 3 euros per item. From November 1, there will be a further increase of €2.

The European Commission's latest estimates cover the period 2028-2034 and already take into account a possible decline in the number of small parcels entering the EU. This also reflects Brussels’ determination to crack down on cheap e-commerce imported goods. The vast majority of these small packages come from China.

Pinduoduo, the parent company of TEMU, China’s low-cost cross-border e-commerce company, said in August this year that the EU’s additional fees for imported small parcels would have a “significant impact” on some of the company’s businesses, but did not specify specific figures. The sales of SHEIN, another Chinese cross-border e-commerce company, had declined before July this year because it increased product prices and reduced advertising expenditures.

China’s e-commerce transformation strategy

Dirk Gotink, a member of the European Parliament who focuses on EU tariff reform, said that the further increase in small package tariffs of 2 euros on November 1 targets a "very harmful business model, that is, low-value and non-compliant e-commerce imports from China." Gotink emphasized, "The new revenue generated gives us the opportunity and means to reverse decades of underinvestment and provide the EU customs authorities with the necessary resources to effectively protect our internal market."

In response to the new regulations, China’s cross-border e-commerce companies are making adjustments. AliExpress, a subsidiary of Alibaba, said it was coping with these costs by increasing local warehousing; but it also warned that these additional costs would harm the interests of low-income families in Europe and "exacerbate the cost of living crisis." SHEIN, which has recently sought to go public, is expanding its warehousing facilities in Poland, saying its focus is on providing faster and more convenient delivery services while maintaining "competitiveness" in price. Its U.S. rival Amazon said that 97% of the products it sells in the EU are fulfilled by warehouses in the EU, so only a very small number of goods will be affected by these fees.