The €150 IOSS Cap: Why Splitting Orders Backfires Legally
Introduction
Every few months a seller or a forwarder asks the same question in a slightly different form: the customer’s basket came to €230, so can we send it as two parcels and keep each one under €150? For years the question sounded like clever logistics planning. Two boxes, two declarations, two IOSS references, and nobody has to deal with the full import procedure that applies above the threshold. The habit was common enough to earn a place in the industry’s folklore, and common enough that EU lawmakers cited it when they justified their latest customs reform.
That reform is now live. Since 1 July 2026, Council Regulation (EU) 2026/382 has removed the long-standing customs duty relief for consignments of €150 or less and replaced it, for the next two years, with a temporary flat duty of €3 per item in the consignment. An EU-wide handling fee of roughly €2 per item position is expected to follow from 1 November 2026, which is less than a month away. The Council’s own reasoning points to undervaluation and the artificial splitting of consignments as the abuses the changes are meant to address. In other words, a practice that many sellers still treat as a harmless trick is now one of the stated targets of the regime.
This article looks at the €150 IOSS cap from the point of view of people who actually move freight. It explains what the threshold really measures, why splitting still looks attractive on a spreadsheet, where it turns into artificial fragmentation in the eyes of customs, what the exposure looks like when an audit lands, and which compliant routes exist for orders that simply cost more than €150. Nothing here is legal or tax advice, and details differ between member states, so treat it as an operational briefing to take to your customs broker and VAT adviser.
What the €150 IOSS Cap Actually Measures
A per-consignment test, not a per-order test
The first misunderstanding to clear up is that €150 is not a spending limit on a customer. IOSS applies to distance sales of imported goods to EU consumers in consignments with an intrinsic value of up to €150. The test is applied to the consignment, which in practice means the goods travelling together from one sender to one recipient. It does not care how many items the customer put in the basket or how many invoices the shop system produced.
That wording is the origin of the splitting habit. If the test sits at consignment level, the reasoning goes, then changing the number of consignments changes the outcome. The flaw is that customs authorities do not accept every consignment as a genuine one. A consignment is supposed to reflect a real shipping event. When the only reason for two boxes is to land beneath a value line, the second box is no longer a separate consignment in any meaningful sense. It is a fragment of a single one, and it can be treated that way.
Intrinsic value, not the shopper’s total
The value that counts is the intrinsic value of the goods, which broadly means the price paid for the goods themselves, with transport and insurance excluded where they are shown separately. This matters for two reasons. A seller who folds shipping into an inflated item price can push a consignment over the line without noticing. A seller who moves value out of the item price and into a shipping or service charge to stay under €150 is edging towards undervaluation. Both behaviours get examined when customs compare declared values with market prices and with the real commercial invoice.
IOSS is a VAT mechanism, not a customs shield
IOSS lets a seller collect VAT at the point of sale, report it through a monthly return, and let the parcel clear without a VAT bill at the door. It is available only within the €150 ceiling. Above that ceiling a consignment falls back into the standard import regime, with duty, import VAT and fuller formalities. Only one IOSS number can be declared on a consignment, so a single declaration cannot mix IOSS and non-IOSS goods.
What changed in July is that IOSS now sits next to a customs obligation. The €3 duty is not paid through the IOSS return. It is a separate charge under customs law, and where IOSS is used, the party using the IOSS number is treated as the declarant and as the customs debtor for that duty. That small piece of drafting has large practical consequences. If a parcel is wrongly declared under your IOSS number, you are not a bystander. You are the person the customs debt attaches to.
The table below summarises the main building blocks as they stand today.
| Topic | Current position | Why it matters for splitting |
| Duty relief up to €150 | Ended on 1 July 2026 under Regulation (EU) 2026/382 | The old duty-free reason to split no longer exists |
| Temporary flat duty | €3 per item (counted by tariff line) in consignments up to €150 using IOSS or postal channels, until 1 July 2028 | Every extra parcel can carry its own set of €3 charges |
| IOSS eligibility | Distance sales to EU consumers, up to €150 per consignment, one IOSS number per consignment | Artificial splitting can put IOSS use in doubt for the whole order |
| Handling fee | About €2 per item position expected from 1 November 2026 | A second fee is added with every additional parcel |
| Consignments above €150 | Standard tariff duty, import VAT and a full declaration, with no IOSS | This is the cliff that splitting tries to avoid |
| Permanent regime | Standard tariff treatment through the EU Customs Data Hub, expected from 2028 | The flat-rate gap is temporary |
How We Got Here: The 2026 Reform in Context
The €150 threshold has been under pressure for a long time. The VAT exemption for low-value imports ended in July 2021 and IOSS was created to collect VAT cleanly on small parcels, but the duty relief stayed in place. Over the following years the volume of small consignments exploded. The Czech Customs Administration, citing EU figures, reports that almost 5.9 billion low-value goods bought online entered the EU in 2025. At that scale customs cannot inspect meaningfully, and the weak points of any threshold system become obvious: undervaluation, mis-description and splitting.
Regulation (EU) 2026/382 is the first step of the response. It comes with updated implementing and delegated provisions under the Union Customs Code, and it sits inside the wider customs reform that will eventually replace national systems with a single EU Customs Data Hub. The transitional €3 duty exists largely because that system is not ready yet. Practitioners who have studied the text note that it includes built-in monitoring and an IT review in 2027, which suggests regulators expect behaviour to shift and intend to watch for it.
National measures have also moved ahead of the EU. Italy introduced a €2 administrative fee on low-value imports from 1 January 2026 under its 2026 budget law, and Romania adopted a handling fee of 25 lei, roughly €5, per package from the same date. Reports indicate that France applies its own early charge, designed to fall away once the EU-wide fee takes effect. The upshot for planners is that the destination country matters, and that the fee stack on a parcel can differ depending on where it is delivered.
| Date | Milestone |
| 1 July 2021 | EU VAT exemption for low-value imports ends and IOSS starts |
| 1 January 2026 | Italy applies a €2 national handling fee on low-value imports; Romania applies 25 lei per package |
| 1 July 2026 | Flat €3 customs duty starts for consignments up to €150, running until 1 July 2028 |
| 1 November 2026 | EU-wide handling fee of about €2 per item position expected; product identifiers on declarations also reported for this date |
| 2028 | EU Customs Data Hub expected to bring standard tariff treatment to low-value imports |
| 2034 | Data Hub expected to have replaced 111 national customs systems |
Two features of this timeline deserve attention from anyone thinking about splitting. First, charges are being layered, so the cost of a parcel is no longer a single number. Second, the regime is explicitly temporary, and from 2028 the €150 line is expected to stop mattering for duty altogether. Any structure built around that line has a short shelf life, and any exposure it creates will outlive it.
Why Splitting Looks Smart on a Spreadsheet
To understand why the practice survives, it helps to run the numbers honestly. For goods that carry a high duty rate, such as many garments and footwear lines, the flat €3 is far cheaper than ordinary tariff duty once the goods exceed a small value. Take a €280 order of cotton knitwear in a single tariff line, and assume an illustrative duty rate of 12 percent, since real rates depend on classification. Cleared as one consignment above €150, it would attract about €33.60 in duty. Split into two €140 parcels under IOSS, the duty drops to €6.
| Cost element | One consignment of €280 | Two parcels of €140 each |
| Customs duty | €33.60 (12% of €280) | €6.00 (2 × €3) |
| Handling fee from 1 November 2026 | €2.00 (one item position) | €4.00 (2 × €2) |
| VAT collection | Import VAT at the border, no IOSS | Collected at checkout through IOSS |
| Extra transport cost | None | Second label, second last-mile delivery |
| Duty plus handling fee | €35.60 | €10.00 |
| Legal position | Standard import | Defensible only if the parcels are genuinely separate consignments |
On paper the split saves about €25 before extra freight. That is the number that sits in a spreadsheet and drives the decision. It is also the number regulators have in mind when they describe the practice as a distortion of competition between EU and non-EU sellers.
For goods with a zero duty rate the arithmetic runs the other way. A consumer drone, for example, carries 0 percent duty when imported above the threshold, while the same goods in a consignment under €150 now pay the flat €3 under the temporary regime. Splitting a zero-duty order into two parcels simply doubles the fixed charges and adds a second shipment.
So the incentive to split has not disappeared. It has changed shape. It now concentrates in high-duty categories, in orders just above €150, and in sellers whose margins can absorb a second shipment. That is exactly the pattern that customs risk analysis looks for. It is also worth pricing the hidden costs. A second parcel needs a second label, a second customs data set, a second last-mile attempt, and often a second customer service ticket when one box arrives days before the other. Add the risk-weighted cost of reclassification, which the next sections explain, and the apparent saving can turn negative.
Where Splitting Crosses the Legal Line
Artificial fragmentation is a named concern
EU institutions have described the practice in plain terms. The Council’s text refers to misuse of the €150 relief, specifically undervaluation and the artificial splitting of consignments, and the stated aims of the reform include discouraging the deliberate splitting of shipments to dodge duty. Guidance for sellers also notes that member state authorities apply anti-splitting logic, so that several parcels addressed to the same recipient within a short window can be treated as one consignment.
The consequence of that treatment is mechanical. Once the parcels are aggregated, the combined value exceeds €150, the IOSS declaration falls outside its scope, and ordinary duty, import VAT and formalities apply. Nobody needs to prove bad faith for that recalculation to happen. Bad faith only matters later, when penalties are considered.
Undervaluation and false declarations
Splitting rarely travels alone. Once a seller starts managing parcels by value band, the pressure to keep each declaration at a tidy figure below €150 grows, and the temptation to adjust invoice values by a few euros follows. A declared value that clusters just under the threshold across hundreds of consignments, while market prices for the same goods sit well above it, is a textbook indicator. At that point the problem is no longer only splitting. It is the declaration of an incorrect customs value, which under national customs law can attract penalties that are separate from, and heavier than, the duty difference.
Misusing the IOSS number
The IOSS number is a registration tied to a legal entity and to a defined scope. Customs systems verify the registration status of every number, and using someone else’s number, or an invalid one, is a clear breach. A subtler misuse is declaring the number on a consignment that, viewed honestly, is part of a larger one above €150. The VAT treatment attached to the number would then be wrong, and tax authorities can exclude a seller from the scheme for persistent non-compliance.
For a business whose EU pricing depends on prepaid VAT and clean delivery, losing IOSS is a commercial blow rather than an administrative inconvenience. Consumers would face import VAT and carrier fees at the door, and conversion and repeat purchase rates tend to fall sharply when that happens.
How Customs and Carriers Spot Split Orders
Detection has become easier, not harder. Every IOSS consignment is declared with data identifying the sender, the consignee, the goods, the value and the IOSS number, and the reform pushes the level of detail further, with item-level duty handling and product identifiers reported from 1 November 2026. Once that data is structured, matching becomes a database query rather than a physical inspection.
The signals analysts look for are rarely exotic. They are the byproducts of how split orders are physically and digitally created.
| Signal | What it looks like in the data | Why it raises risk |
| Sequential order references | Order or invoice numbers that are adjacent or share a prefix | Suggests one order divided across several declarations |
| Same consignee, same window | Several parcels to one name and address arriving within days | Fits the anti-splitting aggregation logic |
| Value clustering | Many declared totals between roughly €130 and €149 | Indicates value engineering around the threshold |
| Related goods across parcels | The same product family spread over several boxes | Looks like a single basket cut into parts |
| Shared transport | Same flight, truck or container, consecutive tracking numbers | Shows the goods really travelled together |
| Price mismatch | Declared prices far below marketplace listings | Points to undervaluation, not only splitting |
Carriers are not neutral parties either. Express and postal operators that file declarations on a seller’s behalf carry exposure of their own, and some will tighten acceptance rules, ask for order-level data, or hold consignments whose paperwork looks engineered. Sellers who treat the carrier as a passive pipe tend to discover this only when a shipment stops moving.
Marketplaces add another layer. Where a platform facilitates the sale and acts as the deemed supplier for VAT purposes, the IOSS number on the parcel usually belongs to the platform rather than to the individual seller, and the platform’s compliance team is exposed to the same customs debt. Platforms respond by monitoring seller behaviour, penalising late delivery, and in some cases removing accounts that generate repeated customs holds. A seller who believes split parcels disappear inside a large marketplace feed is usually mistaken, because the platform holds the order-level data that connects the fragments.
What Getting Caught Actually Costs
Retroactive duty, VAT and penalties
When authorities conclude that several parcels were really one consignment, the starting point is a recalculation. Duty is assessed at the ordinary tariff rate instead of the flat €3, the VAT treatment is corrected, and interest and penalties follow under national law. The Union Customs Code generally allows a customs debt to be notified up to three years after it arose, and longer periods can apply in some member states where the conduct could be criminal.
A seller who split orders for a full year in a high-duty category is therefore not exposed to one bad parcel. It is exposed to a stack of historic consignments that can be audited together, each carrying its own shortfall.
Run the earlier example at scale to see why this matters. A seller shipping 3,000 split orders a month in a 12 percent duty category, each with about €27.60 of duty difference, would face a shortfall of roughly €83,000 a month, or close to €1 million over a year, before interest and penalties. Few small and mid-sized sellers could absorb a bill of that size, and it would arrive long after the margin from splitting had been spent.
Liability moves along the chain
Under the new rules the declarant, not the consumer, is responsible for the customs debt on these low-value parcels, and where IOSS is used the declarant is the party using the IOSS number. Liability therefore no longer sits neatly with the person who opens the front door. Forwarders and brokers that file on a client’s behalf are not automatically safe either, because a representative who knowingly submits misleading data can be drawn into the dispute. This is one reason experienced forwarders ask harder questions about order structure than they did a few years ago.
Operational fallout
Even before an assessment lands, the practical damage appears. Held parcels sit in a customs warehouse while storage fees accrue, customers file chargebacks for late delivery, and marketplaces suspend listings when delivery performance slips. Where goods are refused, return or destruction costs add to the loss. A split order is already the more fragile option, because one fragment can be delayed while the other arrives, and the customer sees only a half-delivered order.
There is a reputational layer too. Sellers and intermediaries that customs authorities tag as higher risk are more likely to be selected for further checks, which slows every later shipment, including the perfectly compliant ones.
Legitimate Splits Versus Artificial Ones
None of this means that multi-parcel orders are illegal. Real supply chains split orders all the time. Items sit in different warehouses, a backordered product ships later, or an oversized item travels by another mode. The test regulators apply is why the split happened and whether the paperwork tells a consistent story.
| Situation | Typically treated as | Evidence that supports your position |
| Items stocked in different warehouses and shipped on separate days | Genuine separate consignments | Picking records, different dispatch dates and carriers |
| Backordered item shipped after restock | Genuine | Order history showing a stock-out and a separate commercial invoice |
| Oversized or restricted goods needing different transport | Genuine | Carrier routing rules and product compliance data |
| Customer places two independent orders days apart | Separate consignments | Separate order timestamps and payments |
| One basket divided only to remain below €150 | Artificial fragmentation | Little that survives scrutiny: same order, same day, same dispatch |
The pattern in the first four rows is that the split is a consequence of something that already happened in the supply chain. In the last row the split is the cause of the paperwork rather than the consequence of the operation. Documentation should therefore be generated by the operation itself, in real time, instead of assembled after a query arrives. A warehouse management system that logs picks, dispatch times and carrier handovers is better evidence than any explanatory letter written months later.
A useful internal rule is to ask whether the shipping decision would be the same if the threshold did not exist. If the honest answer is no, the decision is a tax decision, and someone who can be accountable for it should review it.
What Forwarders Should Ask Before Accepting a Split Shipment
Forwarders sit at the point where commercial intent becomes customs data, which makes them a natural checkpoint. The most useful habit is to ask for the story behind a multi-parcel booking before the goods are consolidated. If a client sends three consignments with consecutive order numbers, the same consignee and declared values of €148, €146 and €149, a forwarder who files without a question has effectively adopted the client’s position. A short written explanation of why the order was divided, backed by system records, takes a few minutes and changes the risk profile of the file.
The questions themselves are plain. Was this a single customer order? When was each item picked, and from which location? Does the commercial invoice match the price shown on the storefront? Which IOSS number will be declared, and is it registered to the entity that actually made the sale? Do the descriptions and tariff codes reflect what is physically in the box? None of this requires legal training, and together the answers separate a real operational split from an engineered one.
Forwarders also need to decide what they will refuse. A policy that the company will not file declarations where the data indicates deliberate fragmentation is easier to defend, commercially and legally, than a series of case-by-case compromises. Clients generally accept clear rules, and the better ones welcome them, because a forwarder with a clean filing record is less likely to see its shipments held.
Compliant Ways to Handle Orders Above €150
Bring the goods in as freight and sell from stock
The most robust answer to the €150 problem is to stop sending every order across the border as an individual parcel. When goods are imported in bulk, by ocean freight or consolidated air freight, they are declared once under a standard commercial entry, with duty assessed on the correct tariff classification and import VAT handled at the border. After release for free circulation, the stock can be sold from within the EU, and individual orders no longer depend on the €150 test at all.
The flat duty and the handling fee are designed for low-value consignments arriving from outside the EU, so the treatment of locally held stock should be confirmed with your broker, and some analysts expect sellers with EU warehouses to face lower fees. The direction of travel is clear enough to plan around. Bulk import turns a parcel-level compliance problem into a shipment-level one, which is far easier to document and defend.
This is where a logistics partner with a full-chain footprint becomes useful. Topway Shipping, headquartered in Shenzhen and operating since 2010, is a provider of cross-border e-commerce logistics solutions whose services span first-leg transportation, overseas warehousing, customs clearance and last-mile delivery. The founding team brings more than 15 years of experience in international logistics and customs clearance, with a strong focus on China–U.S. transportation, and the company offers flexible FCL and LCL ocean freight from China to major ports worldwide. For a seller whose average order is drifting above €150 and who is tempted by splitting, moving to consolidated inbound freight with a warehouse-and-dispatch model is often the structural fix that removes the temptation altogether. VAT registration and tax structuring remain a matter for qualified tax advisers, and Topway Shipping’s role sits on the logistics and clearance side of that picture.
Clear single consignments above €150 properly
Some orders will always be above the cap and will always ship direct to the consumer: a premium product, a bundle, a seasonal gift set. For those, the right approach is to accept that the consignment sits in the standard regime and plan for it. That means a complete commercial invoice, correct tariff classification and origin, a clear decision on who pays duty and VAT, and a customs broker who can file the formal declaration. Many sellers use delivered-duty-paid terms so the customer is not billed at the door. Priced in at checkout, the extra cost is usually a smaller commercial problem than a recipient who is surprised by a bill, and far smaller than a reassessment.
Customs clearance capability matters at this point, because the formal entry is where classification mistakes and valuation questions surface. When the team that handles your first-leg freight also reviews the commercial invoice before arrival, rather than discovering problems afterwards, the loop between your commercial decisions and the customs file gets much shorter.
Price the new landed cost into the offer
A simpler lever is pricing. With €3 per tariff line today and a handling fee of about €2 per item position from November, the cost of a parcel depends on how many distinct product lines it holds. A single-category parcel is cheaper to clear than a mixed basket, so bundle design, SKU structure and minimum order values all become compliance tools. Sellers who recharge these costs at checkout, either inside the product price or as a visible fee, protect margin without touching the structure of the shipment.
The effect is steepest on cheap goods. A €12 accessory that carries €3 of duty and a €2 handling fee loses about 42 percent of its price to fixed charges, while a €90 item loses under 6 percent. Because the charges follow item lines, a basket of five different low-value products can cost €25 to clear, five times as much as a single product of the same combined value. Sellers of low-priced multi-line baskets should model this before the November fee arrives, not after.
Make the data clean, and audit yourself first
Finally, invest in the unglamorous layer. Accurate product descriptions, correct tariff codes, honest values and consistent order references are what make any consignment defensible. If the data is right, a legitimate split is easy to explain. If the data is wrong, no structure is safe.
A quarterly self-review is cheap insurance. Pull last quarter’s EU-bound orders under €150 and look for clusters of adjacent order numbers, repeated consignees within a few days, and declared values bunched just below the line. A seller who finds a pattern first can correct it voluntarily, and voluntary disclosure is generally viewed more favourably than discovery during an audit, although the outcome depends on the member state and the facts.
Conclusion
The €150 cap was always a line on a map, and the temptation to walk around it is understandable. What the 2026 reform has done is change the terrain around that line. Duty relief is gone, a flat €3 charge applies per item, a handling fee is arriving in November, and the stated intention of lawmakers includes closing the very practice that splitting represents. At the same time IOSS ties the seller to the customs debt, and richer declaration data makes pattern detection straightforward.
The honest summary is that splitting an order purely to stay beneath €150 combines modest, shrinking savings with significant and compounding risk: reclassification as one consignment, retroactive duty and VAT, loss of IOSS, and operational disruption. Genuine splits driven by real supply-chain facts remain legitimate when they are documented. Everything else belongs in a different structure.
For sellers and forwarders planning towards the 2028 regime, the durable strategy is accurate data, bulk inbound freight and properly cleared single consignments, not reliance on thresholds. Topway Shipping works with cross-border sellers on exactly this kind of planning, from first-leg transportation and FCL or LCL ocean freight to overseas warehousing, customs clearance and last-mile delivery, and its team can help you review your current order flow before the next peak season. Confirm the final structure with your tax and customs advisers.
FAQs
Q: Does the €3 duty apply if I use IOSS?
A: Yes. IOSS settles VAT only. The €3 duty is a separate customs charge, and the party using the IOSS number is treated as the declarant and customs debtor for it.
Q: Is it illegal to ship one order as two parcels?
A: Not by itself. Genuine splits caused by stock location, backorders or transport needs are normal. The problem arises when the split exists only to keep each parcel under €150, which can be treated as artificial fragmentation.
Q: What happens if customs treat my two parcels as one consignment?
A: The combined value is tested against €150, IOSS no longer fits, and ordinary duty and import VAT apply. Interest and penalties may follow under national law.
Q: When does the EU handling fee start?
A: It is expected from 1 November 2026 at about €2 per item position, subject to publication in time. Italy and Romania already apply national fees.
Q: Will the €150 line still matter after 2028?
A: For customs duty, the temporary €3 regime is due to end and standard tariff treatment is expected to apply once the EU Customs Data Hub is in place. VAT rules follow their own timetable, so confirm current thresholds before planning.
