Dropshipping and EU Legislation in 2026: What Is Allowed and What Is Not?

By the Droppery team | Droppery.io | Updated: April 2026

As a dropshipper in 2026, you can no longer afford to ignore EU legislation. The rules are stricter than ever, enforcement has intensified, and consumers are better protected than at any time before. But don’t panic — at Droppery, we guide entrepreneurs through exactly these kinds of challenges every day. In this comprehensive guide, we explain step by step what has changed, where the pitfalls lie, and how you can operate fully compliant as a dropshipper without sacrificing your profit margin.

What has changed in 2026?
VAT rules for dropshippers in the EU
Consumer law: what must you comply with as a dropshipper?
Product liability: who is responsible?
Common mistakes and how to avoid them
Droppery and compliance: how we help you
Frequently asked questions
Conclusion

1. What has changed in 2026?

The European Union has invested heavily in recent years in tackling abuses in e-commerce. This has had direct consequences for anyone active in dropshipping — especially if you ship from countries outside the EU, such as China, the US, or Turkey.

The three biggest changes you need to know in 2026:

The abolition of the €22 exemption (introduced in 2021, but enforcement has intensified)
Since July 1, 2021, the VAT exemption for packages under €22 has been abolished. In practice, many dropshippers initially noticed little impact because enforcement was slow to start. In 2026, this has completely changed. Customs, tax authorities, and marketplace platforms now work closely together to actively detect evasion.

The EU Product Liability Directive (revised in 2024, effective in 2026)
The revised Product Liability Directive comes into force in December 2026 in all EU member states. This has far-reaching consequences for who is liable when a product causes damage — and this directly affects dropshippers.

The Digital Services Act (DSA) and Digital Markets Act (DMA)
Platforms such as Bol.com, Amazon, and Etsy are required under the DSA to actively act against sellers offering illegal or dangerous products. As a dropshipper selling via such platforms, you are increasingly treated as the responsible party — even if you never physically handle the product.

2. VAT rules for dropshippers in the EU

This is probably the topic we receive the most questions about. And rightly so — VAT rules for dropshipping are complex, but manageable if you understand the basics.

The OSS system: your lifeline

Since 2021, the One Stop Shop (OSS) system exists. This is the EU-wide mechanism that allows you to declare VAT in one go for all EU countries where you sell. Instead of registering in each country separately, you submit everything via one portal — in the Netherlands, this is done through the tax authority.

How does it work in practice?

If you are a Dutch dropshipper selling to consumers in Germany, France, and Italy, you must in principle apply the VAT rules of each destination country once you exceed the local threshold. Via OSS, you report everything in one single declaration.

The threshold for cross-border sales within the EU is €10,000 per year. Below that, you may charge Dutch VAT. Above it, you must apply local VAT per country — unless you use OSS.

Note: OSS does not apply outside the EU

If your supplier ships directly from China or another non-EU country to your EU customer, the IOSS system (Import One Stop Shop) applies. IOSS is specifically designed for imports up to €150. Above €150, different rules apply and customs declarations are required. Working with non-EU suppliers complicates your compliance: discover why European dropshipping is safer than Chinese from a tax and logistics perspective.

What does this mean in practice?

If you use a supplier outside the EU:

· Packages up to €150: use IOSS, ensure your supplier includes the correct VAT code on the package
· Packages above €150: the customer or importer pays import duties and VAT — unless you handle customs yourself
· Always ensure the correct value is declared — undervaluation is fraud and can lead to fines and platform bans

Droppery tip: work with suppliers experienced in IOSS shipping.

3. Consumer law: what must you comply with as a dropshipper?

This is where many dropshippers make mistakes — and that is understandable, because if you never see or touch your product, consumer law can feel abstract. However, the law is clear: you are the seller, so you are responsible.

Right of withdrawal: 14 days, always

Every consumer in the EU has the right to withdraw from a purchase within 14 days after receipt, without giving any reason. This also applies if your supplier is located in China and makes returns practically impossible. The best way to limit the impact of mandatory returns is through smart product selection from the very start.

What this means for dropshippers:
· You must have a clear return procedure on your website
· You may not create barriers that limit the right of withdrawal
· You must process the refund within 14 days after the customer has withdrawn
· You may wait to refund until you have received the product back, but only if you have communicated this in advance

Common mistake: Sending customers to the Chinese supplier for returns. This is not allowed. You are the point of contact, not your supplier.

Smart approach: Work with a local return address or a fulfillment partner in the EU that handles returns for you. Droppery offers solutions for this through our network of European fulfillment partners.

Legal warranty: minimum 2 years

In the EU, consumers are entitled to a minimum of 2 years legal warranty. This is a conformity warranty — the product must do what you promise. If a product breaks within 12 months, it is presumed to have been defective at the time of delivery. The burden of proof then lies with you as the seller.

This has major implications for dropshippers selling low-cost products with a short lifespan. Make sure that you:
· Sell products that meet the described specifications
· Have a clear warranty process in place
· Can hold your supplier accountable if products systematically fail

Product information and language requirements

All product information, including user manuals and safety warnings, must be available in the language of the country where you sell. If you sell to Dutch consumers, essential product information must be in Dutch.

Are you selling CE-required products (electronics, toys, medical devices, etc.)? Then additional documentation requirements apply.

4. Product liability: who is responsible?

This is the area that has changed the most in 2026, and that has the greatest impact on dropshippers working with suppliers outside the EU.

The revised Product Liability Directive

The original EU directive on product liability dates from 1985. In 2024, the EU thoroughly revised this directive, and as of December 2026, the new version is in force in all member states.

The key changes that dropshippers need to know:

1. Expanded definition of “producer”
Previously, almost exclusively the manufacturer was liable for damage caused by a defective product. In the new directive, this has been expanded. If the original producer is located outside the EU and is not accessible for EU consumers, liability shifts to the importer or — and this is where it becomes crucial for dropshippers — to the person who has placed the product on the EU market.

If you, as a dropshipper, sell a product manufactured by a Chinese manufacturer and you technically import it (even indirectly), you can be held liable if the product causes damage.

2. Expanded concept of damage
Damage now also includes non-material damage, loss of data, and psychological harm. The threshold for what is considered “damage” has therefore been lowered.

3. Lower threshold for consumers to prove damage
In the new directive, it is easier for consumers to demonstrate that a product was defective. In some cases, a defect is even presumed if the product does not meet the safety standards that can reasonably be expected.

What should you do concretely?

Verify that your products comply with CE marking
CE marking is mandatory for a large number of product categories (electronics, toys, personal protective equipment, etc.). If you sell products without the required CE marking, you are acting illegally and are liable for any resulting damage. Knowing how to choose a reliable supplier is crucial: discover our 7 criteria for selecting the right dropshipping supplier and avoid legal risks.

Request technical documentation from your supplier
Always request the Declaration of Conformity (DoC) and the technical documentation supporting the CE marking. Serious suppliers can provide this. Suppliers who cannot do so are a risk.

Take out liability insurance
With stricter legislation, adequate liability insurance for e-commerce entrepreneurs is no longer a luxury, but a necessity. Ensure your insurance also covers product liability.

Consider appointing an EU representative
For certain product categories (particularly medical devices, but this is expanding), an EU Authorized Representative is required if the manufacturer is located outside the EU. Check whether this applies to your product category.

5. Common mistakes and how to avoid them

Based on our experience with thousands of dropshippers via Droppery, we see the same mistakes recurring. Do you recognize yourself in any of these?

Mistake 1: Copying product descriptions from AliExpress or Temu
Product descriptions on AliExpress are almost never compliant with EU legislation. They often contain missing or incorrect CE information, misleading claims, and missing safety warnings. Always write your own product descriptions. Working with premium European suppliers eliminates most of these mistakes: discover why premium dropshipping in Europe is the safest strategy in 2026.

Mistake 2: No terms and conditions or privacy policy
A webshop without proper terms and conditions and a privacy policy (compliant with GDPR) is a ticking time bomb. These are not only legal requirements, they also build trust with customers.

Mistake 3: Listing the supplier as return address
As discussed above: you are the seller, you are the return address. Never send customers directly to your supplier.

Mistake 4: No VAT registration when growing
Many dropshippers start small and only register for VAT when it seems “really necessary.” But the €10,000 threshold for EU cross-border sales is reached faster than you think. Make sure to monitor this.

Mistake 5: Selling prohibited products
Certain product categories are strictly regulated or outright prohibited in the EU. Think of certain food supplements, lasers above a certain power, certain knives, or electrical devices without certification. Always check whether your product is allowed in the EU.

6. Droppery and compliance: how we help you

At Droppery, we believe that dropshipping and compliance go hand in hand. A sustainable dropshipping business is a compliant dropshipping business. That is why we have deeply integrated compliance into our platform and services.

Screened suppliers
All suppliers in the Droppery network are screened for their ability to deliver EU-compliant products, including CE documentation, correct VAT handling, and return options within Europe.

IOSS support
Droppery offers integrated support for IOSS shipping, ensuring that your packages from outside the EU are correctly processed at the border.

European fulfillment options
To optimize returns and delivery times, we work with European fulfillment centers. This makes your business faster, compliant, and more customer-oriented.

Education and guidance
Through the Droppery Academy and our support team, we help you stay up to date with the latest legislation. Because EU legislation never stands still — and neither do we.

Want to learn more about how Droppery helps you dropship compliantly? Visit Droppery.io or contact us via our support channel.

7. Frequently asked questions

Do I have to charge VAT as a dropshipper?
Yes. If you sell products to consumers in the EU, you are in principle required to charge VAT. Depending on your turnover, you use the OSS system or the IOSS scheme for imports. Consult a tax advisor for your specific situation.

Am I liable if a product from my supplier is defective?
In many cases: yes. As an importer or the party placing the product on the EU market, you can be held liable for damage caused by a defective product, even if you never physically handled it.

What is the difference between OSS and IOSS?
OSS (One Stop Shop) is for sales within the EU — from an EU supplier to an EU consumer. IOSS (Import One Stop Shop) is for imports from outside the EU with a value up to €150.

Must my webshop be in Dutch?
If you target Dutch consumers, essential product information (instructions, safety warnings) must be available in Dutch. Your terms and conditions and privacy policy should preferably also be in your customer’s language.

What is CE marking and do I need it?
CE marking is mandatory for a large number of product categories sold in the EU, including electrical devices, toys, personal protective equipment, and more. If your product requires CE marking but does not have it, you cannot legally sell it in the EU.

Can I refuse returns?
No. EU consumers have the right to withdraw from purchases within 14 days. There are exceptions (such as custom-made products or opened hygiene products), but in most cases, you must respect the right of withdrawal.

8. Conclusion

Dropshipping in the EU in 2026 is no longer the wild west. Legislation is stricter, enforcement is more serious, and consumers are better protected than ever before. But this does not have to be an obstacle — it is actually an opportunity.

Entrepreneurs who operate compliantly build sustainable businesses with a strong reputation. Customers trust them. Platforms work with them. And they sleep better.

The three pillars for success as a dropshipper in the new EU landscape:

VAT correctly managed — via OSS, IOSS, or local registration
Take consumer law seriously — return policy, warranty, product information
Understand product liability — CE documentation, liability insurance, reliable suppliers

At Droppery, we help you take all these steps. Whether you are starting with dropshipping or want to optimize your existing business — we stand beside you.

👉 Start today via Droppery.io and build a dropshipping business ready for 2026 and beyond.