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The EU changed your landed cost in July
Hey, Have you heard that on the 1st of July the EU removed the €150 duty-free threshold? If you ship into Europe, your landed cost changed three months ago. And most brands I talk to still haven't repriced. Here's the mechanic. It's stranger than a flat fee. A €3 duty now applies per four-digit tariff heading. That's charged per product category, not per parcel. So one parcel with three different product categories carries €9. Bundles and mixed baskets get hit hardest. Those are usually the orders you worked hardest to build. It covers IOSS-registered sellers outside the EU. That's roughly 93% of ecommerce flowing in. And it runs until the EU's new customs system arrives in 2028. On a €40 order, that's not a rounding error.
I recorded an episode last week with Gareth Kobrin, who runs Yonda Tax. He spent about fifteen years inside indirect tax before starting his own company. His whole business is cross-border. One line from him reframed it for me. You charge $100. The tax office makes you add 10%. Your customer pays $110. "And that's not even your money." You're holding it for a government you've never spoken to. In a country you may never have visited. They'll ask for it later.
He also told me when people actually call him. It's only ever two moments. Either a tax office has written to them. Or they're in due diligence on a raise or a sale, and they've just failed it. Nobody calls him early. That's the whole problem.
Three things worth knowing if you sell cross-border. Inventory alone can create an obligation. Stock sitting in a 3PL can be enough on its own. No office, no employees. If you added a fulfilment location this year, you may have registered yourself for something without knowing. Marketplaces don't cover you. Amazon and the big platforms collect on their own sales. That does nothing for your direct Shopify orders in the same state. Going to them first is much cheaper than being found. Voluntary disclosure programs generally cap the lookback and waive most penalties. That option disappears the moment the letter arrives.
Your move this week. List every country and US state where you hold stock. Then every one where you did more than $100,000 of sales in the last four quarters. Now check which of those you're actually registered in. That list takes twenty minutes. It's also the first list a buyer's lawyer builds in diligence. The whole conversation with Gareth is here Talk soon, PS: I'm not an accountant and none of this is tax advice. Thresholds and rules differ by country and by state, and they change. Use the list as a prompt to ask someone qualified. |
Andrej Tumachowitsch
Join my newsletter for up-to-date ecom growth plays from the trenches. Ads, offers, CRO and everything in-between. So you can finally scale profitably.
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