French and Dutch authorities raided streaming giant Netflix offices in Paris and Amsterdam Tuesday as part of an investigation into alleged tax fraud and concealed employment, a judicial source told AFP.
The US company’s headquarters for Europe, the Middle East, and Africa is located in Amsterdam.
Tuesday’s search by specialist financial investigators relates to suspicions of “covering up serious tax fraud and off-the-books work” and is part of a probe opened in November 2022, the source said.
“French and Dutch authorities have been cooperating on this criminal case for many months,” they added.
It was reported that the National Financial Prosecutor’s Office and the Central Office for the Fight against Corruption and Financial and Tax Offenses carried out searches in the streaming giant’s French HQ in the Paris’s 9th arrondissement.
It was noted that the searches were part of a preliminary investigation opened in November 2022 for “laundering of aggravated tax fraud” and “concealed work in an organized gang”.
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The investigation has been sparked by a tax audit in 2022, in which Netflix’s declarations for France between 2019 and 2020 did not chime with the profits that would have been expected from its seven million subscribers at the time, suggesting it had operated tax optimization techniques.
Netflix Services France paid $1.06M (€981,000) in taxes on profits for the 2019-20 fiscal year. The magazine added that Netflix’s French subsidiary appeared to have since abandoned tax optimization strategies, with its declared local turnover ratcheting up accordingly, from $51.3M (€47.1M) in 2020 to $1.3B (€1.2B) in 2022.
The aim of the investigation was to discover how the alleged tax fraud had been implemented internally.
A reported raid was also being conducted simultaneously in Netflix’s European HQ in the Netherlands, following months-long cooperation between French and Dutch investigators.
Netflix is not the first multinational to come under investigation in France for alleged tax optimization practices. In 2022, McDonald’s agreed to pay $1.36B (€1.25B) to the French authorities to avoid criminal prosecution for tax fraud between 2009 and 2020.
AFP
