ongoing searches in Paris and Amsterdam

Netflix France is suspected of “aggravated tax fraud laundering” and of “concealed work in an organized gang”. A search is underway in the 9th arrondissement of Paris, Marianne announced this Tuesday, November 5. According to information from Liberationlaw enforcement still filters access to premises. A similar operation is being carried out in Amsterdam, in collaboration with the Dutch authorities and Eurojust, the European Union unit for better judicial cooperation between Member States.

Netflix France has been in the sights of the National Financial Prosecutor’s Office and the Central Office for the Fight against Corruption and Financial and Tax Offenses since November 2022. It is a tax audit covering the years 2019, 2020 and 2021 which is under review. origin of the investigation carried out by the two institutions. French taxes would have been surprised by the margins declared by Netflix France in 2019, 2% in France when the American company declares 20% in its country of origin. Therefore, the authorities looked into the case of the streaming platform and this “legal tax optimization practice” according to Marianne.

981,000 euros in taxes between 2019 and 2020

Between 2019 and 2020, Netflix Services France paid 981,000 euros in tax on profitswhile its number of paying subscribers amounted to more than seven million in the territory. Until 2021, Netflix subscribers contracted with Netflix International BV (Amsterdam) when subscribing. According to an article from The Letterpublished in August 2023, Netflix France also re-invoiced a “large part of its turnover to other Netflix entities abroad”. This would be particularly true for the Dutch subsidiary.

After the abandonment of this financial arrangement in 2021, the firm’s turnover in France has experienced meteoric growth. He went from 47.1 million euros in 2019 to 1.3 billion euros in 2022. The searches carried out at this time must be used to understand the implementation of this operation. “aggravated tax fraud laundering”.

Concerning the suspicions of “concealed work in an organized gang”, Marianne explains that optimization systems of this kind often work in the same way, namely that a “French subsidiary pays imaginary or overcharged services to other foreign subsidiaries with the aim of reducing its profit in France and paying less taxes there”. Netflix declined to respond to Reuters’ requests for comment. This is not the first time that an American multinational has been targeted by an investigation of this type, McDonald’s was also in 2016 before the dispute is settled in 2022 by the payment of a fine of 1.25 billion euros to avoid prosecution.

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