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Shein has announced a twenty percent surge in worldwide revenues to $37 billion however profits declined as the fast-fashion retailer encountered higher costs, prior to experiencing the effect of latest changes to American taxation rules.

The Singaporean parent company of the quickly expanding retailer said pre-tax profits had fallen by thirteen percent to $1.5bn last year from $1.3 billion in 2023 following an increase in selling and marketing costs, as per recent financial statements.

The company is thought to be trying to go public on the Hong Kong market after plans to float in the US and UK for an approximate £50 billion market value did not proceed as planned.

The China-founded e-commerce firm warned that adjustments to US tariff policies since April this year and their “frequent evolution” had heightened the degree of uncertainties in the world economy”.

It warned: “Continuing changes of trade policies brings complications for companies that may impact the company’s future financial condition and business activities.”

The retailer, which makes its revenues from selling goods and from fees on third-party vendors, is believed to have taken a big hit to business in the United States this year after Donald Trump’s administration closed a exemption that allowed products valued under $800 to be brought in and shipped directly to customers without specific checks and duty.

The de minimis exemption, which had been in place since 1938, was designed to foster growth for importers of low-value items, latterly including e-commerce marketplaces. Nevertheless, the exemption had been criticised for enabling the rapid growth of cheap imports from Chinese suppliers via online marketplaces.

Income tax paid by the company stayed consistent at about $188 million, although that covered $6.1m tax adjustments relating to previous periods.

Shein’s UK arm has been accused of moving the “vast bulk of income” to its parent company in Singapore to cut its British tax bill.

The company paid £9.6m in corporation tax in the United Kingdom even though making £2bn in revenue last year.

A tax transparency advocate commented: “The situation remains that Shein actively minimizes tax payments, facilitated by a chain of entities in Singapore, the BVI and the Cayman Islands.

“The move|“Relocating} of its main office to Singapore has seen profits taxed at 5 to 8 percent over the recent period, with incentives for moving assisting them by US$74.4m in the country in 2024 alone.”

Shein paid no dividend in the last financial year after a $484.5 million payout in 2023.

Shein said in a statement: “The claim that we is evading taxation is wholly false. As with all international company, Shein remits all applicable taxes, including, but not limited to, value-added tax, corporate tax, and labour taxes, as required, and operates in accordance with the applicable regulations and rules of all countries where we operate.”