In brief
Authorities in France and the Netherlands are investigating Netflix for suspected tax fraud, leading to simultaneous raids on the company's offices in Paris and Amsterdam. Allegations include underreporting income and off-the-books work as Netflix escalated its earnings significantly post-2021.
In early morning raids, French and Dutch investigators targeted Netflix's Paris and Amsterdam offices as part of a probe into alleged tax fraud. Initiated in November 2022, the investigation revolves around accusations of serious financial misconduct including "covering up serious tax fraud and off-the-books work," according to the National Financial Prosecutor's office (PNF) in France.While Netflix has yet to provide detailed comments regarding the raids, the company maintains that it complies fully with tax regulations in all regions of operation. The Amsterdam location serves as the headquarters for Netflix’s affairs across Europe, the Middle East, and Africa.Authorities are particularly focused on the company's tax filings from 2019 to 2021. Recent reports have claimed that Netflix minimized its tax obligations by reporting revenue from French operations in the Netherlands until 2021. Following the end of this arrangement, Netflix's declared turnover in France noticeably surged from €47.1 million ($51.3 million) in 2020 to €1.2 billion in 2021.Investigators are now examining whether any attempts to lower profit margins persisted after this significant increase. Netflix has been established in France for over a decade and opened its local office in Paris in 2020, boasting roughly 10 million subscribers in the country, as reported by AFP. As this investigation unfolds, Netflix's handling of taxes in Europe remains under close scrutiny.
