How Netflix uses the Netherlands to accelerate its tax optimization

While the searches ordered by the French courts resumed on Wednesday, November 6, in the Parisian premises of Netflix, those carried out at the European headquarters of the streaming giant, in Amsterdam, had ended. Because Netflix International BV was also visited, Tuesday, November 5 in the morning, by the tax information and investigation service, an agency of the Dutch Ministry of Finance, in liaison with Eurojust, the European judicial cooperation unit. “An investigation is being carried out in France by the National Financial Prosecutor’s Office [PNF] since November 2022 »said the Dutch public prosecutor.

He offered no further comments, explaining that“this is a French investigation”. The PNF's preliminary investigation targeting Netflix France in 2022 concerns possible laundering, aggravated tax fraud and hidden work in an organized gang. The company had already been targeted by a tax audit for the 2019, 2020 and 2021 financial years.

Asked on Tuesday, Netflix management in Amsterdam did not provide comments. In January, an investigation by the Dutch daily NRC had detailed the complex constructions put in place by the company to evade tax. Netflix responded that it respected all tax rules in force in the countries where it operates and contributed massively to employment in the Dutch cultural sector.

The headquarters established in the Netherlands in 2015 employs some 500 people of various nationalities – including French – who manage the activities of the company's Europe, Africa and Middle East zone, and almost half of the company's global subscriptions. streaming company. Worldwide, Netflix had 277 million subscribers in the first quarter of 2024.

“License Fees”

According to an investigation conducted by the British NGO TaxWatch in 2018, the American company had a turnover of 5.5 billion euros that year and paid only 4 million euros in taxes to The Netherlands. The tax system in force in the Dutch kingdom allows foreign companies, including American ones, to avoid double taxation and transfer money to other of their subsidiaries, which reduces their declared profit, and therefore their taxes. National Netflix subsidiaries thus transfer “license fees” to Netflix International BV, which in turn sends them to the United States. The latest annual report published in Amsterdam indicated that in 2023 the company achieved a turnover of 15.8 billion euros, of which 13.6 billion were shipped to other group headquarters.

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