More than 91% of parcels came from China, where Temu and its other low-cost retailers, such as Shein, manufacture and ship most of their products. However, the EU put stricter controls in July 2025, and customs duties are expected to be applied from 2028.
The Chinese online e-commerce platform Temu doubled its pre-tax profits in its EU operations, reaching $120 million, despite having just eight employees, according to its financial statement.
Their profits increased 171% in 2024, compared with $44.1 million the year before, as customers wanted to buy its low-priced products, widely promoted on social media.
Despite these high profits, they paid only $18 million in corporation tax, nearly $3 million of which was a new top-up tax introduced after the EU signed a global minimum tax rate for large companies.
The financial filings for Temu’s Ireland-based EU parent company, Whaleco Technology, revealed that income increased to $1.7 billion, up from $758 million the previous year, prior to the new regulations on discount retailers.
Other separate documents show that Temu now has more than 115 million customers in the EU, which accounts for more than a third of the population.
These figures follow a separate report that showed Temu UK’s operations also doubled its profits and income.
The increase in sales happened before the EU moved to close a loophole that allows packages under €150 to bypass customs duties and some border checks.
In 2023, the EU received 4.6 billion such parcels, approximately 12 million per day, which is three times more than in 2022. More than 91% of parcels came from China, where Temu and its other low-cost retailers, such as Shein, manufacture and ship most of their products. However, the EU put stricter controls in July 2025, and customs duties are expected to be applied from 2028.
The US also stopped its “de minimis” exemption, which allowed goods under $800 to avoid import duties, to limit the expansion of Temu and Shein. The UK government has announced a review of a similar loophole.
Paul Monaghan, the chief executive of the Fair Tax Foundation, estimates that Temu’s Irish business gave $10 billion in consumer sales across the EU, as it reported that this income only accounts for the company’s commission and fees from independent sellers on its marketplace. If Temu has generated $2 billion in sales through its sellers in the UK, that would make the marketplace larger than the UK retailer Next and rival Primark, which is of a similar size.
Monaghan stated that there are some serious questions about why Temu has such a negligible economic and tax contribution in the UK and Europe despite its massive sales. He states that the company has a chain of companies in tax havens, which have been structured in such a way that it leaves little to take advantage of in Europe.
He argued that the UK and other European governments need to act quickly to protect their tax income and local retailers, as they are competing with Chinese e-commerce giants like Shein and Temu, which are structured to facilitate tax avoidance.
When asked about this by the company, they firmly denied any claims that its structure is intended to avoid taxes. The company defended by stating that it has already paid lot of euros as taxes in Europe.
They clarified that the tax figure they have referred to is confined to one legal entity and does not include customs duties, VAT, or other taxes.
The Chinese-based retailer entered the European market just two years ago and has invested heavily in its platform to connect buyers and sellers, thereby resulting in lower prices for consumers and new opportunities for European sellers.
The company is committed to building a sustainable and trusted marketplace that offers high-quality, affordable goods to consumers and helps local sellers expand their businesses across Europe.
