Netflix Offices in Europe Targeted in Tax Investigation

A joint investigation into Netflix’s tax practices in Europe has led to significant raids in Paris and Amsterdam, raising questions about the company's compliance with tax regulations.

Streaming giant Netflix has found itself under scrutiny as French and Dutch authorities carried out raids at its offices in Paris and Amsterdam on Tuesday. This action forms part of an ongoing investigation into alleged tax fraud that has been in motion since November 2022, according to judicial sources from France. Although Netflix has refrained from commenting on the recent developments specifically, the company maintains that it abides by tax laws in all operational territories.

The Netherlands office serves as the headquarters for Netflix's operations across Europe, the Middle East, and Africa, making it a strategic site in this unfolding inquiry. The French investigation, conducted by the National Financial Prosecutor's Office (PNF), targets accusations of “covering up serious tax fraud and off-the-books work." Officials are probing tax filings from the years 2019, 2020, and 2021, with particular interest in the company's financial declarations in France.

Reportedly, close collaboration between French and Dutch officials has been ongoing for several months, with simultaneous searches taking place in both countries as part of the investigation. In a significant observation, a French media source revealed that up until 2021, Netflix reduced its tax liabilities in France by declaring revenue generated within the country to its Dutch offices. This practice reportedly ceased, followed by a dramatic increase in Netflix’s reported turnover in France, which surged from €47.1 million ($51.3 million) in 2020 to €1.2 billion in 2021.

Investigators are now focusing on whether Netflix attempted to continue minimizing its reported profits in France beyond 2021. Netflix began operations in the country over a decade ago, establishing its Paris office in 2020 and amassing around 10 million subscribers as confirmed by the AFP news agency.