Although the searches ordered by the French courts resumed on Wednesday, November 6, at Netflix’s Paris facilities, those carried out at the streaming giant’s European headquarters, in Amsterdam, had ended. Because Netflix International BV also received, on Tuesday morning, November 5, a visit from the tax information and investigation service, an agency of the Dutch Ministry of Finance, in collaboration with Eurojust, the European judicial cooperation unit. “The National Financial Prosecutor’s Office is carrying out an investigation in France [PNF] from November 2022 »stated the Dutch prosecutor.
He made no further comments and explained that“This is a French investigation”. The PNF’s preliminary investigation targeting Netflix France in 2022 concerns possible laundering, aggravated tax fraud and hidden work in an organized gang. The company had already been the subject of a tax audit for the years 2019, 2020 and 2021.
Asked on Tuesday, Netflix management in Amsterdam had no comment. In January, an investigation by the Dutch newspaper NRC had detailed the complex constructions carried out by the company to evade taxes. Netflix responded that it complied with all current tax rules in the countries where it operated and contributed greatly to employment in the Dutch cultural sector.
The headquarters established in the Netherlands in 2015 employs around 500 people of various nationalities, including French, who manage the company’s activities in Europe, Africa and the Middle East and almost half of the company’s global subscriptions. Globally, Netflix had 277 million subscribers in the first quarter of 2024.
“License fees”
According to an investigation carried out by the British NGO TaxWatch in 2018, the American company invoiced 5.5 billion euros that year and paid only 4 million euros in taxes to the Netherlands. The tax system in force in the Dutch kingdom allows foreign companies, including American ones, to avoid double taxation and transfer money to other of their subsidiaries, which reduces their declared profits and, therefore, their taxes. In this way, Netflix’s domestic subsidiaries transfer “licensing fees” to Netflix International BV, which in turn sends them to the United States. The latest annual report published in Amsterdam indicates that in 2023 the company had a turnover of 15.8 billion euros, of which 13.6 billion were sent to other group headquarters.
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