(RightIsRight.co) – In a shocking development, French and Dutch authorities have raided Netflix offices in Paris and Amsterdam as they exposed potential tax fraud by the streaming giant.
This investigation into Netflix’s European operations reveals the ongoing battle against corporate tax evasion and highlights the need for stricter oversight of multinational companies exploiting loopholes to avoid paying their fair share.
The raids, conducted by the French National Financial Prosecutor’s Office (PNF), are part of an investigation that began in November 2022.
Authorities are scrutinizing Netflix’s tax filings from 2019 to 2021, suspecting the company of “covering up serious tax fraud and off-the-books work.”
This probe sheds light on Netflix’s alleged strategy of minimizing tax payments in France by declaring turnover in the Netherlands until 2021.
After changing this practice, Netflix’s declared turnover in France skyrocketed from a mere €47.1 million in 2020 to a staggering €1.2 billion in 2021.
Such a dramatic increase raises serious questions about the company’s previous tax practices and the potential revenue lost to the French government.
While Netflix claimed compliance with local laws, including VAT and contributions to the film industry levy, the ongoing investigation suggested otherwise.
The streaming giant’s tactics mirror those of other tech companies offering global subscriptions, which have long faced tax issues in Europe.
A French source stated, “Cooperation between the French and Dutch authorities has been underway for many months as part of these proceedings,” highlighting the determination of European nations to crack down on corporate tax evasion.
The Netflix investigation is part of a growing trend of countries taking action against streaming services’ tax practices.
Switzerland, Canada, and Australia have recently introduced or enforced local taxes on streaming platforms, recognizing the need to ensure these digital giants contribute their fair share to national economies.
Moreover, Netflix has already faced similar issues in other European countries. In 2022, the company settled a tax dispute with Italy by paying €55.8 million.
This pattern of settlements and investigations across multiple countries suggests a systemic problem with Netflix’s tax strategies and raises questions about potential similar practices in other markets.
As the investigation unfolds, Netflix reported over $9.8 billion in revenue worldwide from July to September 2024, a 15% increase from the previous year.
With such astronomical profits, it is unconscionable that the company would engage in tax evasion schemes, depriving European countries of much-needed revenue for public services and infrastructure.
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