Netflix Faces Tax Fraud Investigation After Raids in France and Netherlands
Netflix's offices in France and the Netherlands were raided as part of a tax fraud investigation. The French Parquet National Financier (PNF) is leading the investigation into financial crime allegations. Netflix's revenue reporting practices and tax payments in France and the Netherlands are under scrutiny.
The investigation, led by the Parquet National Financier (PNF) in France, a unit known for handling financial crime cases involving major international companies, was initiated in November 2022.
A Netflix spokesperson stated, "We are cooperating with the authorities in France, where Netflix is a significant contributor to the local economy, and we comply with the tax laws and regulations in all the countries in which we operate."
Specialists in financial crime and corruption conducted searches at Netflix's offices in central Paris and the company's European headquarters in Amsterdam simultaneously. The French and Dutch authorities have been collaborating for several months as part of this investigation.
The preliminary investigation does not automatically result in criminal charges or a trial, and the specific reasons behind the probe have not been disclosed. Large technology companies, particularly those that offer cross-border services and subscriptions, frequently face challenges from European tax authorities.
According to reports, Netflix's French subsidiary has come under fire for its low reported turnover in comparison to its user base in the country. Netflix Services France reportedly paid less than €1.0 million in corporate taxes from 2019 to 2020 by using a separate unit registered in the Netherlands. However, the company discontinued this practice in 2021.
According to corporate records, Netflix's French unit revenue increased significantly, reaching approximately €1.2 billion in 2021, up from €47 million the previous year. Despite these findings, Netflix France did not respond to the allegations that it reported revenue through Amsterdam rather than France in 2019 and 2020.
In a separate tax dispute resolution, Netflix agreed to pay €55.8 million to Italy in 2022. The streaming giant opened its Paris office in 2020, employing approximately 40 people. Netflix is well-known for creating a wide range of original films and series, including the highly successful "Emily in Paris," often in collaboration with third-party contractors.
Netflix's offices in France and the Netherlands were raided as part of a tax fraud investigation.
The French Parquet National Financier (PNF) is leading the investigation into financial crime allegations.
Netflix's revenue reporting practices and tax payments in France and the Netherlands are under scrutiny.
Source: REUTERS