Searches at Netflix – it’s about tax allegations

The streaming giant Netflix’s headquarters in Paris and Amsterdam were searched because of tax allegations. Financial investigators and anti-corruption investigators took a close look at the company’s headquarters in France, as the German Press Agency in Paris learned from judicial circles. Other, unspecified locations were also searched. The raids took place as part of an investigation into Netflix on suspicion of concealing tax fraud and illegal employment.

At the same time as the raids in France, Dutch investigators searched Netflix’s European headquarters in Amsterdam. This was announced by a spokesman for the public prosecutor’s office. He did not provide any further information. “We have responded to a request for legal assistance from the French authorities. They are leading the investigation.”

The preliminary investigations against the video streaming market leader have been running since November 2022. Exact details were initially not known.

Last year, the magazine “Lettre A” reported that the company had reduced its tax burden until 2021 by declaring its sales in France in the Netherlands. The customers therefore concluded their subscriptions with a Dutch company. Between 2019 and 2020, Netflix in France only paid around 980,000 euros in profit tax for seven million subscribers.

In 2021, Netflix changed its tax strategy, according to the report, causing revenue declared in France to rise from 47.1 million euros in 2020 to 1.2 billion euros the following year. But doubts remained, for example the French subsidiary’s operating margin of two percent compared to the US parent company’s 20 percent was still “very low,” wrote “Lettre A”. The investigators therefore want to check whether Netflix is ​​not “continuing to unlawfully minimize its profits”.

“We comply with the tax regulations of all countries in which we operate worldwide,” a Netflix spokesman said when the preliminary investigation began.

At the end of September 2024, Netflix had over 282 million subscribers worldwide and generated revenue of $9.82 billion with a net profit of $2.4 billion in the third quarter of 2024.

In France, the group recently celebrated its tenth anniversary, reporting more than ten million subscribed households and assuring that it complies with French regulations. Netflix emphasized that it would have invested around 250 million euros in French production in 2023, of which 50 million would be in cinema productions. One of the biggest successes in France is the series “Lupin” with Omar Sy, which made it into the top 10 most-watched series in 70 countries.