Netflix’s offices in Paris and Amsterdam faced raids by French and Dutch authorities over alleged tax fraud. It’s a part of a sweeping investigation into whether the streaming giant has been strategically underreporting profits to keep its tax bills lean across Europe.
According to a judicial source, specialist investigators descended on Netflix’s headquarters for the Europe, Middle East, and Africa region on Tuesday, pursuing suspicions of “covering up serious tax fraud and off-the-books work.” This probe, which started back in November 2022, highlights months of cooperation between French and Dutch authorities, who seem determined to uncover any financial secrets the company might be stashing.
The inquiry particularly scrutinizes Netflix’s tax filings from 2019 through 2021. The company, of course, insists that it plays by the rules wherever it operates. Yet French publication La Lettre A pointed out that until 2021, Netflix set things up so French subscribers technically signed up with a Dutch entity. This clever arrangement reportedly reduced Netflix’s tax payment in France to under one million euros for 2019 and 2020, a number that raises questions given the streaming giant’s massive revenue.
What authorities want to know now is whether Netflix is still trying to dance around its taxes in France, potentially downplaying its profits with the classic tactic of reporting mysteriously low margins for its French arm. Meanwhile, Netflix’s global earnings tell a different story altogether: the company brought in a hefty $9.8 billion from July to September, with a neat $2.4 billion in net profit. These numbers beg the question: is Netflix genuinely playing fair, or just staging a clever financial performance across borders?
