Commercial Invoice Guide for Small Sellers

The Short Answer

If you sell handmade goods on Etsy, run a small Shopify store, or post prints, parts or samples to customers abroad, this change reached you whether you noticed or not. The courier started asking more questions, some parcels came back, and some customers were hit with charges at the door and asked for a refund.

This guide explains what changed in the US and the EU, what a commercial invoice must contain, why the HS code suddenly decides how much your parcel costs, and the mistakes that get parcels held. You can make a commercial invoice with the same invoice generator you use for any other invoice, as long as it carries the fields below.

The End of Duty Free Parcels

For a long time, both of the world's biggest consumer markets let small parcels in without customs duty. The US allowed up to $800 per person per day under what is known as Section 321, or de minimis. The EU exempted consignments worth up to €150 from customs duty, although it has charged VAT on every import since 2021. Cheap parcels flooded in, and both governments decided the rules had to go.

United States: $800 rule suspended for every country

After first ending the exemption for China and Hong Kong in 2025, the US suspended duty free de minimis treatment for all countries from 29 August 2025, under Executive Order 14324. Goods of any value now pay the duties, taxes and fees that apply to them. A few narrow exemptions remain, including genuine gifts under $100 and personal items brought back by travellers under $200. A sale is not a gift, whatever the label says.

European Union: €150 duty exemption removed

From 1 July 2026, the EU removed the customs duty exemption for consignments up to €150 sold in distance sales to consumers. Until the EU's customs data hub for e-commerce is ready, which is planned for 1 July 2028, a temporary flat duty of €3 per item applies. The European Commission says it is charged per item in a consignment based on tariff classification, not on quantity, and that it falls on the declarant, meaning the seller or the importer, not the consumer.

VAT is a separate charge. All goods imported into the EU have been subject to VAT since 1 July 2021, when the old €22 VAT exemption was removed. Sellers can collect that VAT at checkout and declare it through the Import One Stop Shop, known as IOSS, for consignments up to €150.

Small Parcels by the Numbers

The US growth figure explains why the rules changed. A tenfold rise in nine years meant customs could not look at more than a sliver of what arrived. The response on both sides of the Atlantic is the same: every parcel pays something, and the paperwork has to say exactly what is inside.

Which Document Is Which

Small sellers often mix up the documents that travel with a parcel. They do different jobs, and customs reads them differently.

For a simple one box sale, your commercial invoice and your sales invoice can be the same document, provided it carries every customs field. If you want to be clear on the difference between an invoice and a quote, our guide to invoices, receipts and quotes covers it.

Every Field on a Commercial Invoice, Explained

The US spells out what a commercial invoice must contain in federal regulation 19 CFR 141.86, and it must be in English or come with an accurate English translation. Carriers and customs in other countries ask for the same core details. Here is every field worth including, and what goes wrong when it is weak.

Why the HS Code Now Costs Money

The Harmonized System is the shared code list customs offices around the world use to classify goods. The first six digits are the same in every country that uses it. The US adds digits to make a ten digit code, and the EU uses eight digits for its combined nomenclature and ten for its TARIC tariff.

The US regulation does not list the HS code as a required invoice field, but in practice you need it. Carriers ask for it on their electronic customs forms, brokers use it to calculate duty, and in the EU it now decides how much duty your parcel pays. Because the €3 is charged per item by tariff classification, a parcel with three identical scarves pays €3, while a parcel with one scarf, one mug and one print pays €9. Same box, same customer, three times the duty.

You can look up codes on the US Harmonized Tariff Schedule search or your own customs authority's tariff tool. Classify each product once, write the code into your product list, and it goes on every invoice after that without thought.

Who Pays: DAP or DDP

Incoterms are standard trade terms published by the International Chamber of Commerce, and the current version is Incoterms 2020. For small parcels, two of them cover almost every sale.

DAP keeps your price lower but moves the surprise to your customer, and a surprise bill is one of the main reasons international buyers refuse parcels or ask for refunds. DDP costs you more up front but feels like a normal domestic delivery. Many small sellers now build duty into their prices for their main markets and ship DDP there, and use DAP only for occasional orders elsewhere. Whichever you choose, say it on the invoice and on your shop's shipping page.

Two Worked Examples

A US maker sells to a customer in Germany

An American ceramicist sells one handmade mug and one wool scarf to a customer in Berlin, a total well under €150. Under the new EU rules the parcel carries two items by tariff classification, so the flat duty is €3 × 2 = €6. VAT is charged on top at the German standard rate of 19%. If the seller is registered for IOSS, they collect that VAT at checkout and the parcel clears quickly. If not, the customer usually pays the VAT and a handling fee to the courier before delivery. Who pays the €6 depends on who declares the goods, which is the seller when they use IOSS or ship DDP.

A Canadian candle maker sells to a customer in Ohio

Before 29 August 2025, a $120 order of candles would normally have entered the US duty free under the $800 rule. Now it does not. Duty depends on the HTS code for candles and on the country of origin, and US tariff rates have changed often since 2025, so the seller should check the current rate before quoting a delivered price. The carrier will usually handle the customs entry and may add a brokerage fee. With a clear description, the right code, "Canada" as origin and the real price, the parcel clears. Without them, it waits.

Why Parcels Get Held

Most delays come from the same few problems on the invoice. Fix these and most of your parcels will move straight through.

Checklist Before You Ship

1. Classify every product you sell once, and keep the HS code and country of origin in your product list.
2. Decide DAP or DDP for each market you sell into, and say so on your shipping page.
3. For EU customers, decide whether to register for IOSS so VAT is collected at checkout rather than at the door.
4. Create the commercial invoice with the buyer's full contact details, a specific description, the code, origin, quantity, weight, price and currency.
5. List shipping and insurance separately, and write the reason for export as a sale.
6. Sign and date the declaration, attach copies to the parcel or upload them to your carrier, and keep a copy with the order.

If you sell abroad regularly, our guide to invoicing international clients covers currencies and payment terms, and the currency converter helps you price in your customer's currency.

Frequently Asked Questions

The Bottom Line

The era of sending small parcels abroad with a one word description is over. The US ended its $800 duty free rule for every country on 29 August 2025, and the EU replaced its €150 exemption with a €3 per item duty on 1 July 2026. A good commercial invoice is now what decides whether a parcel clears in hours or sits for a week.

Write a real description, add the HS code and country of origin, declare the real price in a stated currency, and choose DAP or DDP on purpose. Do it once per product, and every invoice after that takes a minute.

Related Guides

• How to Invoice International Clients
• EU VAT Invoice Guide
• Currency Converter
• Invoice vs Receipt vs Quote

Sources

1. US Customs and Border Protection. CBP ready to enforce end of de minimis loophole. cbp.gov
2. US Customs and Border Protection. Fact sheet: suspension of duty free de minimis treatment. cbp.gov
3. European Commission. Guidance and legal text on the temporary flat fee on low value imports, which will apply until 1 July 2028. taxation-customs.ec.europa.eu
4. European Commission. The €150 customs duty exemption threshold to be removed as of 2026. taxation-customs.ec.europa.eu
5. European Commission. VAT e-commerce One Stop Shop and IOSS. vat-one-stop-shop.ec.europa.eu
6. 19 CFR 141.86, contents of the commercial invoice, via the Legal Information Institute. law.cornell.edu
7. International Chamber of Commerce. Incoterms 2020. iccwbo.org
8. US International Trade Commission. Harmonized Tariff Schedule search. hts.usitc.gov