In a major development in a tax fraud investigation, authorities from France and the Netherlands conducted coordinated raids on Netflix offices in Paris and Amsterdam on Tuesday, according to a judicial source.
The inquiry, which began in November 2022, is looking into allegations of “serious tax fraud and off-the-books work” within the global streaming company.
Specialized financial investigators from both countries focused their efforts on Netflix’s European headquarters in Amsterdam. The company is already facing scrutiny in France regarding its tax filings from 2019 to 2021.
Netflix has insisted that it adheres to tax regulations in all the countries where it operates.
However, French news outlet La Lettre A previously reported that until 2021, Netflix organized its French operations in a manner that allowed subscribers to sign contracts through a Dutch subsidiary, thereby reducing its tax liabilities in France.
This setup allegedly resulted in Netflix paying less than €1 million in taxes to the French government for the years 2019 and 2020.
The investigation aims to ascertain whether Netflix engaged in any practices that may have illegally reduced its reported profits in France, thereby impacting its tax obligations.
In the third quarter of this year, Netflix reported over $9.8 billion in global revenue and a net profit of $2.4 billion from its 282 million subscribers.
