Austrian police raid Labubu store in Vienna for suspected tax evasion

A Labubu pop-up store in the centre of the Austrian capital Vienna was raided by customs officers on Wednesday.

The authorities found that the shop, selling the incredibly popular Chinese dolls, neglected to hand out receipts after purchases, and the cash register had not yet been connected to the tax registry.

The shop had monthly sales in August of approximately €43,000, which had not yet been reported to the tax office, Austrian press agency APA reported.

Officers also suspected that the shop was selling falsified versions of the Chinese dolls, known as "Lafufus".

"Further investigations will be conducted in this regard," the financial police stated. The inspection was conducted following a complaint from the market authority.

The Labubu store in the Austrian capital is facing thousands of euros in fines.

The shop appears to have also violated labour regulations. The shop assistant on duty at the time of the investigation was a Pakistani national who did not have a valid work permit under the Foreign Nationals Employment Act (AuslBG), authorities said.

He was also registered as a part-time employee, but the shop manager and managing director were unable to provide records of the employees' working hours.

Reportedly, several complaints were filed with the district administrative authority, resulting in a total of approximately €5,000 in fines, according to the tax police.

In connection with ongoing tax investigations and further complaints regarding the cash register violations, the shop is facing possible fines of up to €15,000.

"We cannot afford to tolerate tax fraud," Finance Minister Markus Marterbauer said, "regardless of whether the cases are large or small."

The doll that made billions

The small, toothy toys, gaining immense popularity via social media channels, made their producer Pop Mart International Group the most valuable Chinese toy company in a relatively short period of time.

The elf-like toys became a hot commodity — they are sold in a blind-box model, where buyers don’t know which variant they’ll get.

Labubu dolls fly off store shelves in Asia, Europe and the US for a price between €15 and €36, but new series are sold out in a very short time, fuelling the resale market, where costs get increasingly higher.

An ultra-rare human-sized edition fetched $150,000 (€128,700) at a Beijing auction.

The mania pushed Pop Mart International Group's founder and CEO Wang Ning’s fortune to $26.2 billion (€22.5bn), a 243% surge so far this year alone, according to the Bloomberg Billionaires Index.

He was reported to have become China's tenth richest person by Forbes in June this year.