The French subsidiary in Paris and the European headquarters of Netflix in Amsterdam are the subject of searches on Tuesday as part of an investigation opened at the end of 2022 on suspicion of tax fraud and hidden work.
“Searchs are being conducted today in various locations, notably at the headquarters of the Netflix companies in France” and “are being carried out by investigators from the Central Office for the Fight against Corruption and Financial and Tax Offenses, in the presence of members of the PNF “, a judicial source told AFP, confirming information from the French magazine Marianne.
Requested by AFP, Netflix France did not immediately comment.
The National Financial Prosecutor’s Office (PNF) opened a preliminary investigation in November 2022 in France, into suspicions of laundering, aggravated tax fraud and hidden work in an organized gang.
Netflix’s headquarters for Europe, the Middle East and Africa, located in Amsterdam, was also searched “simultaneously by Dutch magistrates and investigators, accompanied by French magistrates and investigators”, the source further detailed. judicial.
“A criminal cooperation action between the French and Dutch authorities has been carried out for many months as part of this procedure and has been the subject of coordination by Eurojust,” it was further underlined.
In the summer of 2023, a French publication, Lettre A, revealed that the streaming giant was the subject of a tax audit in France covering the 2019, 2020 and 2021 financial years.
“We comply with the tax rules of all the countries in which we operate around the world,” responded a Netflix spokesperson at the time.
For Letter A, until 2021, the group “minimized its taxation by declaring its turnover generated in France in the Netherlands”, its customers contracting with a Dutch company.
“Between 2019 and 2020, Netflix Services France”, which already claimed 7 million subscribers in France, paid “only 981,000 euros in taxes on profits”.
After the abandonment of this financial arrangement in 2021, the turnover declared in France by Netflix jumped from 47.1 million euros in 2020 to 1.2 billion euros.
Abuse?
Looking at the 2021 financial year, “tax agents intend to verify whether (…) Netflix has not continued to improperly minimize its profits,” explained Letter A.
She cited in particular the gap between the “microscopic operational margin”, of less than 2%, generated in France by the platform in 2021, and that of its American parent company, of 20%, ensuring that “this gap persisted in 2022 », financial year in which the company “paid only 6.5 million euros in profits”.
“By re-invoicing a large part of its turnover to other Netflix entities abroad”, the firm is engaging in “a practice of legal tax optimization” under certain conditions, explained the media.
With more than 282 million subscribers worldwide at the end of September, Netflix achieved $9.82 billion in revenue in the third quarter of 2024, for a net profit of $2.4 billion.
In France, the group has just celebrated ten years of its arrival, declares more than 10 million subscriber households and ensures compliance with French regulations by complying with investment obligations in creation.
Netflix thus assured that it had invested “250 million euros” in 2023 in French production, including “50 million in cinema”.
Among its great successes in France: “Lupin”, a series launched with actor Omar Sy in 2021 and which reached “the top 10 most watched series in 70 countries”, underlines the platform.
