the giant Netflix raided in Paris and Amsterdam

The French subsidiary in Paris and the European headquarters of Netflix in Amsterdam are the subject of searches on Tuesday, November 5 as part of an investigation opened at the end of 2022 on suspicion of tax fraud and concealed work.

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“Searchs are being carried out today in various places, notably at the headquarters of the Netflix companies in France” et “are carried out by investigators from the Central Office for the Fight against Corruption and Financial and Tax Offenses (OCLCIFF), in the presence of members of the PNF”indicated a judicial source, confirming information from Marianne.

Requested by AFP, Netflix France did not immediately comment.

The National Financial Prosecutor’s Office (PNF) opened a preliminary investigation in November 2022, into suspicions of laundering, aggravated tax fraud and hidden work in an organized gang.

Netflix’s Europe, Middle East and Africa headquarters in Amsterdam was also raided “simultaneously by Dutch magistrates and investigators, accompanied by French magistrates and investigators”, further detailed the judicial source.

Netflix headquarters in Amsterdam on November 5.

Photo : AFP/VNA/CVN

“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 coordinated by Eurojust,” we again underlined.

Eurojust confirmed that it supported the investigation “by organizing judicial cooperation” Franco-Dutch, notably via a meeting in The Hague, headquarters of Eurojust.

“We confirm that operations were carried out as part of a request for French mutual criminal assistance,” Dutch prosecutors told AFP.

In the summer of 2023, Letter 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 countries in which we operate around the world,” a Netflix spokesperson then reacted.

For Letter A, until 2021, the group “minimized its taxation by declaring in the Netherlands its turnover generated in France”its clients contracting with a Dutch company.

“Between 2019 and 2020, Netflix Services France”, which already claimed seven million subscribers in France, thus paid “only 981,000 euros in tax 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 ahead to 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 operating margin”, of less than 2%, released 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 from the profits”.

Netflix generated USD 9.82 billion in revenue in the third quarter of 2024, with net profit of USD 2.4 billion.

Photo : AFP/VNA/CVN

“By re-invoicing a large part of its turnover to other Netflix entities abroad”, the firm engages in “a legal tax optimization practice” under certain conditions, explained the media.

With more than 282 million subscribers worldwide at the end of September, Netflix achieved USD 9.82 billion in revenue in the third quarter of 2024, for a net profit of USD 2.4 billion.

In France, the group has just celebrated ten years of its arrival, declares more than 10 million subscriber households and ensures that it complies with French regulations by complying with investment obligations in creation, by paying full-rate VAT as well as the contribution to the CNC of 5.15% of its turnover.

Netflix thus assured that it had invested “250 million euros” in 2023 in French production, including “50 million in cinema”.

Among his great successes in France, “Lupin”, launched with Omar Sy in 2021 and which reached “the top 10 most watched series in 70 countries”, touts the platform.

AFP/VNA/CVN