Last week Tuesday, the French and Dutch authorities conducted a raid on the Paris and Amsterdam offices of the streaming giant Netflix as part of an investigation into potential tax fraud, according to a judicial source who spoke to AFP.
The US company’s headquarters for Europe, the Middle East, and Africa is located in Amsterdam.
French, Dutch Authorities Search Netflix Offices in a Tax Investigation
Tuesday’s search by specialist financial investigators relates to suspicions of “covering up serious tax fraud and off-the-books work” and is part of a probe opened in November 2022, the source said.
“French and Dutch authorities have been cooperating on this criminal case for many months,” they added.
Netflix is also under investigation in France for its tax filings for 2019, 2020, and 2021.
The company insisted when the probes went public last year that it complies with tax law in all countries where it operates.
French outlet La Lettre A had reported that Netflix’s French operation was structured until 2021 so that all subscribers signed up with a Dutch subsidiary.
That left it paying less than one million euros ($1.1 million at today’s rates) in taxes to Paris across 2019 and 2020.
Authorities are now trying to determine whether Netflix kept up illegal attempts to minimise its reported profits and thereby its tax bill, La Lettre A added.
The French subsidiary reported very low operating margins compared to the US mothership, the outlet said.
Netflix earned over $9.8 billion in revenue worldwide from its 282 million subscribers in July-September this year, with net profit reaching $2.4 billion.
AFP