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Commission proposes significant reforms to the EU Customs Union

AUTHORs: Dara Higgins , Matthew Broadstock co-author(s): Anna O'Duffy Services: Tax DATE: 19/05/2023

The European Commission (the "Commission") has proposed significant reforms of the EU Customs Union which will impact a wide range of stakeholders, including EU traders, consumers and national customs authorities.  On 17 May 2023, the Commission published its proposals, describing them as 'the most ambitious and comprehensive reform of the EU Customs Union' since its inception. The Commission has also published the proposed timeline for these reforms to take effect, with the earliest changes scheduled for 2028.

The Commission's press release notes the increasing pressure on the EU's custom union as a result of a surge in e-commerce together with the growth in the number of prohibitions and restrictions relating to certain goods.  The proposed measures aim to improve efficiency of the customs processes and cooperation between Member States, in order to enhance security of the customs union. The reforms are contained in draft Regulations and a draft Directive which will repeal and replace the current Union Customs Code. 

The Commission's proposed reforms include the following at a high level:

  • introduction of a new EU Customs Authority - a decentralised agency to share Member States' expertise and resources;
  • introduction of an EU Customs Data Hub – a centralised customs information hub, providing increased transparency for customs authorities as well as simplified customs processes for businesses;
  • introduction of a customs 'One-Stop Shop';
  • new 'deemed importer' rules;
  • 'Trust & Check' traders programme (an enhanced version of the AEO regime); and  
  • removal of the exemption from customs duty for goods valued below €150.

The proposals place significant emphasis on simplification measures for businesses carrying out  customs processes, as well as the EU's goal of keeping pace with the digital transformation. The proposed measures also seek to enhance customs authorities' toolkit for risk management and customs checks. The proposals are divided into three pillars as set out below:

1. Partnership with business

The Commission's proposals include a new EU Customs Data Hub to centralise data provided by businesses into a single online environment. The EU Customs Data Hub will be managed by the EU Customs Authority and, over time, will replace Member States' own existing customs IT infrastructure. The Commission notes that this will allow for simplified customs-related processes for businesses when submitting their customs information, while also giving customs authorities more oversight of supply chains and movement of goods. By partnering with businesses on the EU Customs Data Hub in this way, the Commission aims to reduce customs interventions for imported goods, while enhancing the supervision and risk management abilities of customs authorities.

2. Customs checks

The new EU Customs Authority will be a decentralised agency to pool Member States' expertise and resources. The EU Customs Authority will assist Member States in carrying out their customs checks by providing real-time data from the shared information on the EU Customs Data Hub. Member States will be able to coordinate inspections and act cooperatively in order to respond efficiently to risks. Artificial intelligence will also be employed to monitor data and to free up custom authorities' resources to deal with issues as they arise. According to the Commission, the EU Customs Authority will play a central role in tackling 'border shopping', using the centralised and real-time data of the EU Customs Data Hub.

3. E-commerce

As noted, the proposals seek to abolish the current exemption from customs duty for goods falling below the €150 valuation threshold.  In order to ensure the customs rules and VAT rules are aligned, the Commission also proposes to amend the EU VAT Directive to abolish the €150 intrinsic value threshold for the deemed re-seller rules in respect of imported goods sold via certain online platforms.

In a significant change from the current state-of-play, the Commission's proposed rules will require online platforms outside the EU who are selling goods into the EU, to be responsible for accounting for customs duties and VAT at the time of purchase in respect of all goods, irrespective of value. These online platforms will become the 'deemed importer' and  EU consumers will no longer bear the risk of hidden import charges when a parcel arrives.


In terms of timing, it is proposed that the EU Customs Authority will become operational on 1 January 2028.  The Commission notes that the EU Customs Data Hub will be live for e-commerce consignments in 2028, before opening to other importers in 2032. Overall, the Commission envisages a 10-15 year transition period for these reforms to come into effect, to ensure smooth introduction of the new measures without causing disruption to customs operations.

If you would like to discuss how to ensure your business can navigate the changes that will arise from these proposals, or indeed discuss any other matters, please contact Matthew Broadstock, Dara Higgins or your usual Matheson contact.