Berlin, November 22, 2025 – A new tax policy targeting cross-border small parcels from China will take effect in Germany on November 24, 2025, bringing significant changes to the cost structure of Sino-German cross-border e-commerce transactions. According to official announcements from the German Federal Ministry of Finance, all e-commerce parcels shipped from China to Germany will be subject to a unified 23% value-added tax (VAT), while the previous minimum tax exemption threshold will be fully abolished.
The policy adjustment includes two core provisions. Firstly, the long-standing "tax exemption for goods valued below 22 euros" will be completely repealed, meaning all parcels from China, regardless of their declared value, will be required to pay VAT. Secondly, a uniform 23% VAT rate will be applied to all relevant e-commerce parcels, marking a standardized tax treatment for cross-border small parcel transactions.
German authorities stated that the new policy aims to "protect local retail and manufacturing industries and curb the unregulated inflow of low-quality Chinese goods into the European market." Data shows that nearly 70% of international small parcels entering Europe in 2024 originated from China, and the German finance department estimates that the annual VAT gap caused by tax-exempt small parcels exceeds 10 billion US dollars. This measure is also part of the EU's overall tax reform, following the bloc's political agreement to abolish the 150-euro tariff exemption, aiming to impose tariffs on all imported goods from the first euro.
For cross-border e-commerce sellers and relevant clients, the policy is expected to directly impact tariff costs. Industry forecasts indicate that the retail prices of Chinese goods in the German market may rise by an average of 23%, putting pressure on sellers relying on price advantages. Meanwhile, compliance costs will increase significantly, as sellers need to complete German VAT registration, adopt electronic invoicing systems, and some may even need to hire local tax representatives in Europe. German customs clearance processes may also experience efficiency fluctuations due to the expected surge in declaration volumes.
