China’s Temu more than doubles EU profits to nearly $120m despite having only eight staff | Retail industry

The Chinese language on-line market Temu’s EU operations greater than doubled pre-tax income final yr to only beneath $120m (£90m) regardless of using simply eight folks, accounts present.They rose 171% within the 12 months to December 2024 in contrast with the $44.1m the yr earlier than, as buyers snapped up its low-cost items, that are broadly promoted on social media.Nonetheless, the corporate paid simply $18m in company tax, nearly $3m of which was a compulsory top-up tax introduced in on the finish of 2023 after the EU signed as much as a worldwide minimal tax charge for giant corporations.The accounts filed for the group’s Eire-based EU dad or mum group, Whaleco Expertise, additionally confirmed revenues rose to $1.7bn, in contrast with $758m the earlier yr, earlier than new controls on the super-budget retailer.Separate paperwork present Temu now has greater than 115 million prospects throughout the EU – equal to greater than 1 / 4 of the inhabitants.The figures emerged after separate accounts confirmed nearly doubling income and revenues on the on-line market’s UK operations.The rise in gross sales comes earlier than strikes by the EU to shut a loophole that permits packages value lower than €150 (£130) to keep away from customs responsibility and a few border checks.Final yr, 4.6bn low-value parcels entered the EU, equal to 12m a day, 3 times greater than in 2022. Greater than 91% of parcels valued at lower than €150 got here from China, the place Temu and its fellow low-cost vendor Shein make and dispatch most of their items.Nonetheless, controls started to be tightened in July this yr, and customs responsibility is anticipated to be utilized from 2028.The US this summer time abolished its “de minimis” exemption, which allowed items value lower than $800 to skip import responsibility, to restrict the rise of Temu and Shein, whereas the UK chancellor has stated she is reviewing the same loophole.Paul Monaghan, the chief government of the Truthful Tax Basis, estimates that Temu’s Irish entity facilitated shopper gross sales of $10bn within the EU – as its income determine solely accounts for the corporate’s fee and costs from impartial sellers on its market.If Temu’s estimated $2bn in gross sales by way of its sellers are included within the UK, that will make {the marketplace} larger than the UK retailer Subsequent and about the identical dimension as Primark.“Severe questions have to be requested as to why Temu has such a negligible financial and tax footprint within the UK and throughout Europe regardless of its monumental gross sales,” Monaghan stated.“What now we have here’s a chain of corporations in a collection of tax havens, which have been structured in order to depart little or no tax profit in Europe.“The UK and different European governments want to maneuver way more shortly to not solely shield their tax base, however permit current retailers to compete on a degree enjoying area with these Chinese language e-commerce giants which have abroad tax avoidance hard-wired into their constructions.skip previous publication promotionSign as much as Enterprise TodayGet set for the working day – we’ll level you to all of the enterprise information and evaluation you want each morningPrivacy Discover: Newsletters might include details about charities, on-line adverts, and content material funded by outdoors events. Should you would not have an account, we’ll create a visitor account for you on theguardian.com to ship you this article. You’ll be able to full full registration at any time. For extra details about how we use your information see our Privateness Coverage. We use Google reCaptcha to guard our web site and the Google Privateness Coverage and Phrases of Service apply.after publication promotion“Standing sturdy on the worldwide minimal tax and digital companies tax, reviewing customs responsibility exemptions and bolstering necessities for multinationals to publish a country-by-country breakdown of the taxes they pay can be an incredible place for politicians to begin.”A spokesperson for Temu stated its operations in Eire have been “actual working corporations using actual folks” and the worker numbers had since modified, though they declined to say how. In addition they stated worker numbers in any a part of the enterprise didn’t replicate the complete scale of its operational presence.“Temu categorically rejects any suggestion that our construction or operations are designed to keep away from taxes or minimise our financial footprint in Europe. Regardless of being a younger and fast-growing firm nonetheless within the funding section, now we have already paid billions of euros in taxes throughout European jurisdictions, and that determine will proceed to rise as our operations mature.“The tax determine cited refers solely to the tax paid by a single authorized entity and doesn’t embody customs duties, VAT, and different taxes.“Temu entered the European market simply two years in the past and has invested closely in constructing its platform to attach sellers and shoppers extra effectively, passing these efficiencies again to shoppers within the type of decrease costs on high quality items. On the identical time, now we have been creating new progress alternatives for native sellers throughout Europe.“Our focus is on the long run: constructing a sustainable, compliant, and trusted platform that helps shoppers entry high quality merchandise at inexpensive costs whereas enabling native sellers throughout Europe to develop their companies and attain new markets.” This text was amended on 14 October 2025 to replace Temu’s assertion on workers numbers.