Netflix offices were raided in Paris and Amsterdam because of a tax investigation
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French and Dutch financial authorities raided Netflix’s offices as part of a long-running investigation into possible tax fraud and labor law violations.
The US streaming giant’s offices in Paris and Amsterdam were searched by investigators on Tuesday morning, including those from France’s central office against corruption, financial crime and taxes (OCLCIFF). According to two people familiar with the situation, they were accompanied by members of the National Financial Prosecutor’s Office (PNF).
According to an insider, the raid was part of a preliminary investigation opened in November 2022 to look into possible “tax fraud laundering and aggravated labor law violations.”
No charges have been filed yet and preliminary investigations in France do not necessarily mean there will be a trial.
A Netflix spokesperson said: “We are cooperating with authorities in France, where Netflix is a significant contributor to the local economy – and we comply with all tax laws and regulations countries where we operate”.
The fiscal prosecutor’s office declined to comment.
The person added that a criminal cooperation effort between French and Dutch authorities was conducted as part of this investigation, coordinated by Eurojust, the European Union’s criminal justice cooperation agency. Europe.
The other said that the raids appeared to be partly related to Netflix using the Netherlands to record subscription revenue from France between 2019 and 2021, through its main European subsidiary in Amsterdam.
The investigation is also expected to cover arrangements dating back to 2021, when Netflix’s French subsidiary began receiving local subscription revenue but then had to pay a fee for the rights to offer it. streaming service to France for its headquarters in the Netherlands.
France conducted a tax audit on the company two years ago in connection with these deals. French media outlet La Lettre first reported on the tax audit last year, saying Netflix’s declared annual revenue in France had increased from 47.1 million euros in 2020 to 1.2 billion euros in 2021 after it stopped booking revenue in the Netherlands.
People close to Netflix say the company has cooperated fully with the audit and has previously stated that it complies with tax laws in all countries where it operates.
France is one of Netflix’s biggest European markets, with more than 10 million subscribers reported in the country two years ago, and is home to many popular shows including hit series Lupine.
French financial prosecutors have targeted other large multinationals operating in France for allegedly carrying out financial optimization. American fast food giant McDonald’s paid a fine of 1.25 billion euros in 2022 to avoid criminal prosecution for tax fraud as part of a deal with French justice. Probes of practices at consulting firm McKinsey are also underway.
