EU Finance Ministers Agree to Lift €150 Cap on VAT Import Scheme, Miss Tobacco Tax Deal
The Takeaway: EU finance ministers agreed on 9 November to open the VAT Import One Stop Shop to online sales of any value, removing its €150 limit, and to make non-EU platforms liable for VAT on all goods they sell into the EU from 1 July 2028. They failed to agree the tobacco tax package. The European Commission proposes €31.7 billion of next year’s Ukraine Support Loan for defence and up to €13.3 billion for budget support, and the Council approved Italy’s use of the national escape clause for defence, widened to energy security.
EU shoppers buying from non-EU platforms should generally see all VAT and customs due in the checkout price once the platform itself takes charge of the tax in July 2028.
Ministers open the VAT import scheme to goods of any value
Non-EU online sellers can already use the digital Import One Stop Shop to account for the VAT on their sales into the EU. It lets them register in one member state for their VAT obligations across the whole bloc, but only for parcels valued at under €150.
The package agreed by the Council extends the scheme to all goods, whatever their value. It also covers e-commerce sales of goods that non-EU operators keep in customs warehouses inside the EU, which platforms often use to import in bulk before repackaging items for individual buyers.
The larger change arrives with the launch of the EU customs data hub on 1 July 2028. From that date, non-EU online platforms will be treated as the deemed supplier for VAT on all goods they sell into the EU, regardless of value.
In practice, the platform itself collects the VAT on behalf of the underlying seller and the consumer, and pays it to the tax authorities.
The European Parliament will now be consulted, and the Council will then adopt the rules formally. Simon Harris, Ireland’s Tánaiste and Minister for Finance, called the agreement “the final building block of our fundamental overhaul of the EU’s customs framework”.
VAT rules line up with the end of the €150 duty exemption
The VAT changes follow the EU customs reform, which removes the long-standing exemption that let goods worth under €150 enter the EU without customs duty. Under the reform, the non-EU supplier or facilitator is the importer in a distance sale to an EU consumer.
An interim duty has applied since 1 July 2026. It charges a flat €3 for each category of goods in parcels worth under €150, rather than per parcel, until the data hub is due to be operational in July 2028.
Each product type counts as one category, so a parcel holding three types of product pays €9, the Council says.
A separate EU handling fee of €2 per item on small consignments sold at a distance applies in all member states from 1 November 2026, at the level set by the European Commission. It is meant to cover the cost of customs controls on small parcels.
The €3 duty is owed by platforms, sellers or carriers as the legal debtor, never by the consumer, so it is not collected from the buyer at delivery. Of its revenue, 75% goes to the EU budget and member states keep 25%.
After July 2028 the standard customs tariff applies, based on each good’s value, origin and classification, so the charge can be higher or lower than €3.
In The Edge’s reading, 1 July 2028 becomes the single switch date for imported online purchases: the flat duty gives way to the full tariff on the same day that platforms take on VAT collection for goods of every value.
Ministers did not reach agreement on the tobacco taxation package: most member states backed the presidency’s compromise, but one said it could not support the text. The revision would raise minimum excise duty rates across the EU and extend the rules to new tobacco and nicotine products, and the Commission says it will keep supporting the Irish presidency in seeking a deal.
Commission proposes €31.7 billion for Ukraine’s defence in 2027
Commissioner Valdis Dombrovskis updated ministers on the Commission’s proposal for the second year of the €90 billion Ukraine Support Loan. The Commission adopted the plan on 30 October; it sets out €45 billion for 2027 and now needs a Council implementing decision.
Defence industrial capacity would receive €31.7 billion, or 70.4% of the 2027 amount. Budget support of up to €13.3 billion would make up the rest.
That budget support would be split equally between the Ukraine Facility and macro-financial assistance, giving each channel up to €6.65 billion.
The proposal tilts the second year further toward defence. In 2026, defence was allocated €28.3 billion, or 62.9%. The 2027 plan moves €3.4 billion from budget support to the defence leg.
Across both years, defence is allocated €60 billion and budget support €30 billion. The Commission aims to begin the 2027 disbursements at the start of the year, citing the liquidity pressures Ukraine faces.
Ukraine Support Loan allocations (in € billions)
| Component | 2026 | 2027 plan | Two years |
|---|---|---|---|
| Defence industrial capacity | 28.3 | 31.7 | 60.0 |
| Budget support | 16.7 | 13.3 | 30.0 |
| Total | 45.0 | 45.0 | 90.0 |
The 2026 figures are the Council’s implementing decision of 23 April 2026; the 2027 figures are the Commission’s proposal of 30 October 2026, awaiting Council adoption. Budget support is an upper limit, split equally between the Ukraine Facility and macro-financial assistance.
The 2026 money is still flowing. On 5 November the Commission paid €4.36 billion to Ukraine, of which €3.7 billion was the second instalment of this year’s macro-financial assistance. The other €658 million was the seventh defence payment under the loan.
That brings macro-financial assistance paid this year to €6.9 billion of the €8.35 billion planned.
Defence payments have now reached €16.4 billion, or 58.0% of this year’s defence allocation.
The Ukraine Facility received its first payment from the loan, €800 million, on 2 October. With the macro-financial assistance already paid, that leaves €9.0 billion of this year’s budget support still to be paid.
In all, €20.9 billion of the 2026 loan remains available for disbursement this year, €11.9 billion of it for defence, subject to Ukraine meeting the conditions.
Among the 12 conditions Ukraine met for the latest instalment was removing its own VAT exemption for low-value commercial imports in parcels. The Commission is also working on Ukraine’s additional funding needs for 2027, which EU leaders intend to take up again this month.
Recovery fund nears its close and Italy wins defence flexibility
The Recovery and Resilience Facility is in its final weeks. Austria, France and Sweden have received their final payments since October, joining Denmark, and Latvia, Germany, Czechia and Finland are set to follow shortly.
France’s final €6.1 billion, paid on 30 October, completed its €40.3 billion plan. All 176 of its milestones and targets were met.
Austria’s final €306 million, paid the same day, brought it to the full €3.96 billion of its allocation.
Germany’s final request, worth €6 billion, was positively assessed on 21 October and completes a plan worth €30.3 billion. All payments under the facility must be made by 31 December 2026.
The Council also approved Italy’s use of the national escape clause for defence spending, widened to measures for energy security. The clause runs for four years and allows up to 1.5% of GDP in flexibility. Energy security measures are capped at 0.6% of GDP in total from 2026 to 2028.
A month earlier, on 9 October, the Council broadened Greece’s clause to cover measures that strengthen energy security. The national escape clause offers that flexibility until 2028, as set out here on 9 November.
Dombrovskis also presented the Commission’s 2026 overview report on simplification, implementation and enforcement. The initiatives proposed so far could save more than €22 billion a year, including €7.7 billion for small and medium-sized enterprises, the Commissioner said.
What to watch:
11 December: the next regular Economic and Financial Affairs Council.
31 December 2026: the deadline for all payments under the Recovery and Resilience Facility.
1 July 2028: the new VAT rules are due to apply, together with the EU customs data hub.
Figures are from the Council of the EU’s press release on VAT for online sales and its meeting page for the Economic and Financial Affairs Council, both dated 9 November 2026, and its page on EU action on the influx of small parcels; and from the European Commission’s statement of remarks at the ECOFIN press conference of 9 November 2026, its releases on the Ukraine Support Loan of 30 October and 5 November 2026 and on the Recovery and Resilience Facility of 21 and 30 October 2026, its remarks of 9 October 2026 and its questions and answers on the €3 customs duty of 1 July 2026; percentages and comparisons not attributed to a source are The Edge’s calculations.
Sources: Council of the EU, European Commission, The Edge.
