Netflix raided in Europe as part of tax fraud probe
French and Dutch authorities have searched the offices of streaming giant Netflix in Paris and Amsterdam as part of a probe into tax fraud, according to sources.
Netlix Paris office. Image by Chesnot/Getty Images
French and Dutch authorities have searched the offices of streaming giant Netflix in Paris and Amsterdam as part of a probe into tax fraud, according to sources.
The raids were part of a preliminary investigation opened in November 2022 and carried out by the French special financial crime prosecution unit PNF, according to a French judicial source.
The search on Tuesday (November 5th) was related to suspicions of “covering up serious tax fraud and off-the-books work,” the French media reported, quoting the source.
It has taken place in “various locations” in France, including Paris, as well as Amsterdam, where Netflix has its headquarters for Europe, the Middle East, and Africa. The raid in Amsterdam was conducted by both French and Dutch investigators.
French and Dutch authorities have been cooperating “for many months” on these proceedings, the source was quoted as saying by Le Monde. The European Union Agency for Criminal Justice Cooperation (Eurojust) is assisting in the case.
Netflix is also under investigation for tax filings for 2019, 2020, and 2021 in France. The company has not commented on Tuesday’s raids but said last year when the probes went public that it complies with tax laws in all countries where it operates.
A preliminary investigation does not mean that criminal charges will be brought against Netflix or that it will be taken to trial. The PNF, which investigates high-profile white-collar crime, is known to take cases that involve large international companies.
Last year, the news website La Lettre reported that Netflix’s French subsidiary had come under scrutiny from tax authorities over its low reported revenue, which the outlet said was at odds with the number of paid subscribers in the country.
According to La Lettre, between 2019 and 2020, Netflix paid less than €1 million ($1.09 million) in corporate taxes in France by declaring its revenue there in the Netherlands. The streaming platform reportedly stopped the practice in 2021.
The annual revenue of Netflix’s French unit surged from €47.1 million ($51.3 million) in 2020 to €1.2 billion ($1.31 billion) in 2021, La Lettre noted.
However, the investigators are trying to determine whether Netflix continued to attempt to minimize its profits after 2021. Netflix arrived in France more than 10 years ago and opened a Paris office in 2020. It has more than 10 million subscribers in the country.