by Key Takeaways
- Netflix’s Paris and Amsterdam offices were raided by French and Dutch authorities on suspicion of tax fraud and money laundering.
- The company’s 2019–2021 tax returns are under investigation.
- Between 2020 and 2021, Netflix’s revenue in France increased significantly from €47.1 million to €1.2 billion.
In connection with a tax fraud and money laundering investigation, Netflix offices in Paris and Amsterdam were raided by French and Dutch officials.
According to a French legal source, Netflix’s Paris office was inspected by investigators on November 5, and its Amsterdam headquarters were raided by Dutch officials, as reported by Reuters.
Since November 2022, France and the Netherlands have been working together on the case. The inquiry is headed by the National Financial Prosecutor’s Office (PNF), which focuses on intricate white-collar crimes involving major global corporations.
An early-stage investigation in France does not portend charges or a trial. According to Netflix, it complies with tax regulations everywhere it operates.
Netflix Is Under European Tax Investigation
Netflix’s tax returns for 2019–2021 are also under investigation.
Despite having a sizable user base, the company’s French unit came under fire for underreporting its earnings, according to news site La Lettre. Before stopping the practice in 2021, Netflix France paid less than one million euros in taxes between 2019 and 2020 through a Dutch corporation. Later, its reported turnover in France increased to €1.2 billion ($1.3 billion) in 2021 from €47.1 million ($51.3 million) in 2020. Authorities are probably looking at whether Netflix will continue to cut its earnings after 2021, though.
Netflix inaugurated its Paris office in 2020 after launching in France over a decade earlier. It currently has almost 10 million users nationwide, according to AFP.
As of September, Netflix has 282 million users globally, and its taxes are rising. For instance, Canada required foreign platforms to fund domestic content, Switzerland implemented a tax structure for streamers in 2022, and Netflix started to pay taxes on the money it received from Australian customers.
In 2022, Netflix paid €55.8 million ($60 million) to settle a tax evasion investigation in Italy. Italy contended that the business ought to have paid taxes locally and used its resources to provide content. After resolving the conflict, Netflix opened an office in Rome with a number of workers.
