The Chinese online marketplace Temu has reported significant growth in its European operations, with pre-tax profits increasing to nearly $120 million (£90 million) in the last year, a rise of 171% compared to the $44.1 million reported the previous year. This growth occurred while the company employed only eight people. Revenue also surged to $1.7 billion, up from $758 million in the previous year. The rise in profits and revenues coincides with an increasing customer base of over 115 million in the EU, representing more than a quarter of its population.
Despite these figures, the company paid only $18 million in corporation tax, with a portion stemming from a new top-up tax introduced after the EU agreed to a global minimum tax rate for large corporations. Observations have been made regarding the structure of Temu’s operations in Europe, particularly as the EU moves to impose stricter customs regulations, potentially affecting its low-cost business model. Last year, 4.6 billion low-value parcels entered the EU, with over 91% valued at less than €150 coming from China. The tightening of customs rules comes as the U.S. has eliminated its “de minimis” exemption for imports, a move linked to curbing the influence of Temu and similar companies.
Critics have raised questions about Temu’s tax strategy and economic footprint in the UK and Europe, suggesting it may have been designed to minimize tax contributions. There are calls for European governments to enhance tax regulations to ensure fair competition with global e-commerce entities, particularly regarding transparency in tax reporting.
In response, a spokesperson for Temu emphasized that the company operates legitimate business practices in Ireland and does not seek to minimize its economic impact in Europe. They noted that the tax figures discussed represent only one legal entity and stressed ongoing tax contributions and long-term investment in the region.
Source: https://www.theguardian.com/business/2025/oct/13/china-temu-eu-profits-staff-tax