Germany backs changes to EU import taxes, potentially ending exemptions benefiting Shein and Temu. This shift aims to level the playing field for retailers.
Shein and Temu face criticism in the US for exploiting import tax exemptions, undercutting rivals, and evading customs inspections. Critics allege unfair advantages.
The practice helps the two companies offer dresses for as little as $8 and smart watches for $25 to shoppers around the world. Shein is currently stepping up preparations for a London listing, after an attempt to float in New York faced pushback from US lawmakers.
Online purchases from non-EU countries under 150 euros ($163) evade customs duties under current EU regulations.
Germany’s main retail association, Handelsverband Deutschland (HDE), has been lobbying the German government. Consequently, the exemption has led to a surge in small parcels from online platforms like Shein and Temu. However, customs authorities struggle to verify compliance with EU rules.
Germany’s finance minister Christian Lindner “has signalled that Germany will support the abolition of the 150-euro duty-free limit at the European level,” the HDE told Reuters.
As discussions surrounding the Germany EU tax break gain momentum, stakeholders are closely monitoring the potential outcomes.
Ultimately, the resolution will shape Shein and Temu’s future and establish a precedent for EU taxation policies. By aligning with Germany’s stance, other member states may follow suit, ushering in a new era of fiscal responsibility and economic equilibrium.
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