De minimis: The small rule with a big impact

A first order from a new country. A small brand ordering samples. A repeat sale from a loyal customer. These milestones are the heartbeat of small businesses—and many of those moments travel across borders in small boxes. 

Lately, small boxes often come with bigger fees because of changes to a once-obscure trade term: de minimis.  

These changes come with a steep price for entrepreneurs, threatening their ability to participate in cross-border commerce, and removing a critical lifeline for small businesses.

TL;DR: De minimis explained

The term itself comes from the Latin “de minimis non curat lex”—the law doesn’t concern itself with trifles.

In trade, it’s a threshold. If a shipment’s value is below that number, it clears without duties and with simplified customs. Buyers get their goods sooner, and businesses pay less. This streamlined process keeps commerce flowing quickly and affordably.

Basically, de minimis is the border express lane that allows entrepreneurs to keep their prices competitive.

One in five Shopify merchants use a de minimis exemption, based on a survey conducted in April 2025.* Among those, one third rely heavily on it, with over 90% of their shipments qualifying for de minimis.

“Most of our international orders are small,” says Lea Wieser, founder of Arkitaip. “A linen dress here, a couple of shirts and trousers there. Without the de minimis rule, every one of those little parcels is treated like a big commercial shipment, with extra paperwork, unexpected fees, and potential delays at the border.”

Many countries are rethinking the rules for small cross‑border packages, which means entrepreneurs like Lea all over the world are feeling the shift.

Why it’s in the news

For years, de minimis lived in the background—useful and steady. Then the parcel economy blew up. Every storefront became a global brand. Online shopping became the norm, with people ordering simple items like t‑shirts or spools of thread from halfway around the world. Billions of small parcels began crossing borders every year.

That scale created pressure, and became an attractive revenue source for debt-laden governments. Because of these factors, many countries are reviewing the rules. Their goals are to:

• Modernize systems to handle today’s parcel volume without grinding to a halt
• Collect taxes and duties as ecommerce grows
• Block low-quality or potentially illegal goods moving through small parcels
• Stop games like under‑valuation (“this $150 item is worth $15”) and split shipments (breaking one $900 order into three $300 boxes to duck thresholds)

How do we meet these goals without burying entrepreneurs under paperwork, disproportionate fees, and delays? That’s the open question.

The world at a glance

Countries tune de minimis to fit their economies. Here’s a quick map:

• Australia: Around $1,000 AUD (~$700 USD) duty‑free, 10% GST on all imports.
• Canada: Exemptions for shipments under $150 (duties) and $40 (taxes) for many courier shipments from the U.S./Mexico. All other countries have a $20 combined threshold, so most global shipments face duties and taxes.
• European Union: VAT (sales tax) applies to all imports since 2021. Duty exemptions up to €150 are still in place, but the EU is planning to remove the exemption as early as 2026.
• Japan: Around 10,000 JPY (~$70 USD), with potential tightening in the near future.
• New Zealand: Around $1,000 NZD (~$600 USD) duty‑free, 15% GST on all imports.
• Singapore: About 400 SGD (~$300 USD).
• UK: £135 (~$170 USD) for customs duty exemption. VAT applies to all imports (collected at sale for lower values, at customs for higher ones). The post‑Brexit takeaway: no VAT breaks, and tighter revenue control.
• United States: Ended its $800 threshold in 2025 (depending on the outcome of the Supreme Court case). Every import—any value—now follows regular entry rules and pays applicable duties/taxes. Translation: the old “low‑value fast lane” checkbox is gone.

Thresholds are trending down in many places, but not everywhere. Several countries keep a fast lane and collect VAT/GST instead of duties on small parcels.

What this means for small businesses

When thresholds drop or disappear, new costs pop up. Duties, brokerage fees, and paperwork become a toll on every box. For big companies, that toll is mostly background noise. For entrepreneurs, it can be devastating. Not to mention the higher costs that can fall on customers as businesses try to remain viable.

Shopify merchants around the world feel the pain of these changes. Swedish entrepreneur Victor Kabo, cofounder of Bookman, puts it this way: “Small businesses like ours operate on thin margins—every additional fee and administrative requirement makes it harder to compete with larger companies that have the resources to absorb these costs.”

Here’s how it lands on the people building from the ground up:

• Error costs hurt more: Misclassify a product code, miss an origin detail, or under‑document a shipment, and businesses pay in delays or penalties. Enterprises have compliance teams. Entrepreneurs have…themselves. The same mistake costs them disproportionately more.
• Fixed costs, no scale: Each shipment carries setup costs (entries, broker fees, classification work) that don’t care if you’re moving 10 units or 10,000. That “per‑parcel” tax lands heaviest on the smallest orders.
• Margin squeeze: A duty that looks small on paper can erase thin margins in reality. Many small businesses live on 10–20% net margins. Add cross-border costs and they either need to reprice or lose money.
• The experimentation tax: Sample orders and tiny test runs are how entrepreneurs learn. Extra fees on every try means fewer tries. 
• Checkout friction you can’t hide: In markets that now collect duties/VAT on every parcel, surprise doorstep charges can tank conversion and spike support tickets. (Many merchants use Shopify Markets to help with this problem.)
• Inflation, even if you sell local: Packaging, components, specialty supplies—if any piece crosses a border, it’s now pricier and slower. Small businesses feel it even if their customers never do.
• Cross‑border parity cuts both ways: As more destinations tighten, foreign customers pay VAT/duties on everything. More will abandon their carts, returns get more complex, and “try‑before‑you‑buy” gets harder to support.

All of this makes entrepreneurship harder and costlier. The more capital and compliance muscle you have, the easier this gets. That’s why small‑business‑friendly rules matter: precision in policy keeps the door open for the next builder, not just the biggest one.

Field notes from the front lines

We work with millions of businesses who ship tiny boxes that matter. De minimis was built for them: the ones who ship the everyday, low‑cost packages that build a global economy and delight customers around the world. 

Many argue this is a debate about big platforms exploiting the system. But those platforms continue to ship regardless of policy changes, and the collateral damage falls squarely on the shoulders of small businesses.

It’s possible to fix cross-border commerce problems without shutting down legitimate trade:

Target better, not broader 

With advanced electronic data and modern scanning, customs can spot the needles in the haystack—mismatched descriptions, improbable values, suspicious routings—without dumping the haystack on every small shipper. That’s how you stop exploitation and still let a $75 first sale move fast and affordably.

Consider “tax but no duty” for small values 

Places like the EU, Australia, and New Zealand show that governments can collect VAT/GST on all imports while keeping duty exemptions for modest shipments. Revenue flows, small parcels keep moving, and entrepreneurs aren’t nailed with duties on every tiny order.

Why this matters to us and the economy

When policy raises the cost of every small box, it also raises the barrier to entrepreneurship. It slows open trade and favors bigger incumbents that have compliance teams and cash buffers. 

Economies don’t get stronger by making it harder to start small. 

That’s why de minimis matters. It’s the infrastructure that allows entrepreneurs to compete.

We need to keep the fast lane open for good-faith, low‑cost trade. Not just for existing small businesses, but also for the next million jobs that begin as a single cart, a single click, or a single small parcel crossing a border.

---

*Survey based on 1,994 active US-based Shopify merchants selling physical goods.