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French and Dutch authorities conducted raids on Netflix offices in Paris and Amsterdam in connection with a tax fraud and money laundering investigation.
On November 5, investigators searched Netflix’s Paris office, while Dutch officials conducted a raid at its Amsterdam headquarters, a French judicial source said, according to Reuters.
According to a French judicial source, investigators of tax fraud have raided #Netflix offices in #Paris and #Amsterdam. The investigation, launched by France’s PNF in 2022, targets tax fraud laundering. Netflix’s European operations are under scrutiny in both countries. pic.twitter.com/d6FsjPagUG
— Ivan Kircanski (@KircanskiIvan) November 5, 2024
France and the Netherlands have been joining forces on the case since November 2022. The National Financial Prosecutor’s Office (PNF) leads the investigation, which specializes in complex white-collar crimes involving large international companies.
In France, an early-stage inquiry does not indicate charges or a trial. Netflix states that it conforms to tax laws wherever it conducts business.
Netflix Faces Tax Scrutiny in Europe
Netflix is also facing an investigation into its tax filings from 2019 to 2021.
The news outlet La Lettre stated that the company’s French subsidiary faced scrutiny over its underreported revenue despite a large user base. From 2019 to 2020, Netflix France paid under 1 million euros in taxes through a Dutch unit, ending the practice in 2021. Afterward, its declared turnover in France jumped from €47.1 million ($51.3 million) in 2020 to €1.2 billion ($1.3 billion) in 2021. However, authorities are likely investigating if Netflix will keep reducing its profits after 2021.
Netflix launched in France more than 10 years ago and opened its Paris office in 2020. According to AFP, it now has around 10 million users nationwide.
With 282 million users worldwide as of September, Netflix faces increasing taxes. For example, in 2022, Switzerland introduced a tax framework for streamers, Canada mandated international platforms to support domestic content, and Netflix began paying taxes on revenue from Australian subscribers.
In 2022, Netflix resolved a tax evasion probe in Italy by paying €55.8 million ($60 million). Italy argued that the company should have settled taxes locally, using the country’s resources to deliver content. Netflix settled the dispute and established an office in Rome with several employees.
