In a major development in a tax fraud investigation, authorities from France and the Netherlands conducted coordinated raids on Netflix's offices in Paris and Amsterdam on Tuesday. The joint probe, which commenced in November 2022, is investigating allegations that the streaming giant engaged in "covering up serious tax fraud and undeclared labor practices," according to a judicial source.
The raids targeted Netflix's European headquarters in Amsterdam, as financial crime units from both countries sought further evidence on the company’s tax practices. Netflix has already faced scrutiny in France over its tax filings for the years 2019 to 2021.
The company maintains that it adheres to tax laws in all countries it operates in. However, French media outlet La Lettre A reported that until 2021, Netflix had structured its French operations to route subscriber contracts through a Dutch subsidiary, a move that allegedly lowered its tax liabilities in France. This arrangement reportedly resulted in Netflix paying under €1 million in taxes to France for both 2019 and 2020.
The ongoing investigation aims to clarify whether Netflix continued practices that may have legally underreported profits in France, effectively reducing its tax contributions. In the third quarter of this year alone, Netflix reported global revenues exceeding $9.8 billion, with a net profit of $2.4 billion, supported by a subscriber base of over 282 million.
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