Coopérative U étrille Shein leader's statement: "We don't share the same power dynamics"
Let's Break Down the Tax Gap Between Super U and Shein
In the fashion retail game, it's a wild west showdown between traditional stores and online giants like Shein. This uneven battlefield is evident in France, where a Hyper U generating a mere 25th of Shein's turnover ends up forking out double the taxes. Dominique Schelcher, president of Cooperative U, calls out this stark disparity and accuses Shein of skirting fiscal responsibilities.
On RMC, Domino Schelcher, the feisty president of Cooperative U, took a swipe at Shein, charging them with dodgy tax practices. The shocker? The Chinese group shelled out a paltry €273,000 in taxes for an estimated €1.6 billion in French sales. That's less than an average Super U!
The gap's as wide as the English Channel. A Super U in Vitry-en-Artois coughs up roughly the same amount as Shein in taxes, but on a teensy €34.3 million turnover, compared to Shein's billion-dollar empire. On the other end of the spectrum, the Hyper U in Pont-de-Beauvoisin, with a turnover of €65.3 million, shells out over €500,000. What the hell is going on here? "We're not on the same level playing field!" grumbles Domino, clamoring for fiscal parity between physical commerce and e-commerce.
Now, Here Comes the Lowdown on Shein
Shein's French Turnover Declared to be Less Than 10 Million Euros
According to RMC's crunching of numbers, the aforementioned Hyper U's tax predicament can be traced back to smart ass tax engineering. The digging by L'informé reveals that Shein declared only €9.9 million in turnover and a profit of €301,000 in France in 2023. Officially, its French subsidiary handles marketing and comms, with around 20 employees. Sales to French customers are invoiced from Ireland, where the corporate tax rate is a mere 12.5%, far lower than the French rate (25%). The whole game's propped up on a web of shell companies leading to the Cayman Islands.
Shein, a Toxic Tangled MessIn addition to the tax issue, Domino also points to another problem: "It's 600 planes arriving every night from China to Europe" he says, referencing questionable products not always controlled equally to local goods. The government's had enough, slapping measures like handling fees on each small parcel entering the EU from 2026, and potentially abolishing the customs duty exemption on shipments under €150 as part of the reform of the customs union in 2028.
Shein: A Storm in a Tax Haven Teacup?
In essence, the tax discrepancy between e-commerce and brick-and-mortar retail is a complex affair driven by differences in tax structures, international agreements, and operational models. E-commerce companies can often twist these systems to their advantage, while physical stores bear more direct local taxes. So, let's hope for some fiscal fairness to even things out!
- Domino Schelcher, the president of Cooperative U, criticizes Shein for their perceived tax avoidance strategies, stating they paid a negligible amount compared to their substantial French sales.
- A comparison reveals that Shein, with an estimated €1.6 billion in French sales, paid only €273,000 in taxes, which is significantly less than what a small Super U pays on a fraction of that turnover.
- The report further suggests that Shein's tax engineering involves declaring a small fraction of their actual sales in France, around €9.9 million, resulting in a minimal tax liability.
- Domino also raised concerns about the environmental impact of Shein's operations, stating the constant influx of planes from China could be problematic.
- The European Union has acknowledged this issue and has imposed measures such as handling fees on small parcels entering the EU from 2026, and potential abolition of customs duty exemption on shipments under €150.
- The tax disparity between e-commerce and traditional brick-and-mortar retail is a complex issue, rooted in differences in tax structures, international agreements, and operational models, and it is hoped that some fiscal fairness will be implemented to even things out.
