Netflix is at the center of a tax scandal in France and the Netherlands. Authorities are investigating possible financial fraud by the company related to underreporting of income and tax evasion.
Netflix Tax Investigation
Netflix Office Searches
On Tuesday, French law enforcement agencies conducted searches at Netflix offices in France. These actions are part of an investigation into alleged tax evasion that was initiated in early 2022. This was reported by the famous French publications Marianne and Libération.
Inconsistencies in tax returns
An audit of Netflix's French tax returns for 2019-2020 found inconsistencies. The company's reported revenues did not match the expected financial returns from the 7 million subscribers Netflix had at the time. This resulted in the company paying less taxes than it should have.
Scale of tax payments
According to Marianne, Netflix Services France paid only 981,000 euros (about $1.06 million) income tax for the 2019-2020 financial year. The main goal of the current investigation is to find out how the alleged tax fraud was carried out within the company.
The international nature of the investigation
Liberation newspaper reports that searches were carried out not only in France, but also in the European headquarters Netflix in the Netherlands. This was the result of a long collaboration between French and Dutch investigators.
Tax investigation precedents
It is worth noting that Netflix is not the only large international company that has come under the radar of the French tax authorities. In 2022, McDonald's agreed to pay France 1.25 billion euros ($1.36 billion) to avoid prosecution for tax fraud.
Glossary
- Netflix is an American entertainment company that provides streaming services and produces films and TV series
- Marianne - French news magazine
- Libération - French daily newspaper
- McDonald's is an American corporation operating in the field of public catering
- The Netherlands is a country in Western Europe
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Discussion of the topic – Tax scandal: Netflix under the radar of investigators in Europe
Netflix offices in France and the Netherlands are being searched on suspicion of tax fraud. The information came from the magazine Marianne and the newspaper Libération.
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Gabriela
Wow! Netflix is under the radar of tax authorities in France and the Netherlands. I wonder how this will affect subscription prices? 🤔
Klaus
Gabriela, I don't think this will affect the prices. Most likely, Netflix will simply have to pay a fine, like McDonald's did last year. Although $1.36 billion is not a small amount!
Pierre
Yes, large corporations are constantly trying to circumvent tax laws. It's good that they are caught. Maybe now Netflix will do business more honestly in Europe.
Isabella
Pierre, I agree! I hope this makes other companies think too. I wonder how long the investigation took? 🕵️♀️
Victor
It's all nonsense. Taxes, investigations... It would be better to do something useful. Netflix already provides jobs and entertains people. And now what, will the offices in Europe be closed?
Gabriela
Victor, I don’t think they will close. But you must admit that paying taxes honestly is important for the economy of the countries where they work. 💼
Klaus
I wonder how this will affect the streaming industry as a whole? Maybe other platforms will start checking too? 🎬
Olena
Klaus, good question! Perhaps this will be a signal for the entire industry. It would be great if this led to more transparency in the entertainment business. 👍