Temu is becoming increasingly popular among small businesses and individuals, especially for purchasing affordable promotional materials and branded merchandise. However, Temu currently does not issue VAT invoices for businesses, making direct corporate expense accounting more challenging.

There is, however, a legal workaround: purchasing as a private individual and reselling to your company. Below, we outline the steps you need to take to properly account for these costs in your business.

1. Purchasing as a Private Individual

Since Temu does not provide invoices for business purchases, promotional materials must be bought as a private individual. In this case, the purchase is not a direct business expense since the invoice is issued in the individual’s name.

2. Reselling to the Company

The private individual can resell the goods (such as promotional materials purchased from Temu) to the company. This transaction falls under the rules for selling movable property as defined in the Personal Income Tax Act (Act CXVII of 1995):

• Revenue from selling movable property is only taxable if the annual income exceeds HUF 600,000.
• Taxable income is determined as the difference between revenue and verified costs. If costs cannot be verified, 25% of the revenue is considered taxable income.
• If the total annual income (revenue minus verified costs) does not exceed HUF 200,000, it remains tax-free.

3. Accounting for the Transaction in the Business

The company can record the purchase as an expense based on a sales contract issued by the private individual. The sales contract should include:

• The seller’s (private individual’s) name and details,
• The company’s details,
• A description of the goods,
• The date of sale,
• The price and any additional costs.

4. Key Considerations

• The private individual must comply with tax rules related to selling movable property.
• If the company does not receive an invoice from Temu, but purchases the goods from a private individual, the expense is accounted for based on the sales contract.
• If annual income exceeds HUF 600,000, taxable income may arise. However, if the verified taxable income remains below HUF 200,000, it is still tax-free. Therefore, it is advisable for the private individual to keep purchase receipts to deduct costs from taxable income.

5. Accounting Support and Expert Assistance

To ensure proper bookkeeping and compliance with tax regulations, it is recommended to seek professional accounting services. Our firm provides comprehensive accounting solutions, including tax optimization and financial administration.

Conclusion

It is possible to account for promotional materials purchased from Temu as business expenses if the purchase is made as a private individual and then resold to the company. However, it is essential to adhere to the Personal Income Tax Act, be mindful of tax thresholds, and maintain proper documentation for the sales transaction.