New episode between Netflix and European justice. The French subsidiary in Paris and the group’s European headquarters in Amsterdam were searched on Tuesday October 5 as part of an investigation opened at the end of 2022 on suspicions of tax evasion and concealed work.

“Searches are being conducted today at various locations, including the headquarters of Netflix companies in France.” and “are carried out by investigators from the Office central de lutte contre la corruption et les infractions financières et fiscales (OCLCIFF), in the presence of members of the PNF”.a judicial source told AFP, confirming a report in Marianne. When contacted by AFP, Netflix France had no immediate comment.

The National Financial Prosecutor’s Office (PNF) opened a preliminary investigation in November 2022 into suspicions of aggravated tax fraud laundering and concealed work in an organized gang. Netflix’s headquarters for Europe, the Middle East and Africa, located in Amsterdam, were also searched. “simultaneously by Dutch magistrates and investigators, accompanied by French magistrates and investigators”the judicial source added. “A criminal cooperation action between the French and Dutch authorities has been conducted for many months in the context of these proceedings and has been coordinated by Eurojust.”we added.

In the summer of 2023, La Lettre A had revealed that the streaming giant was subject to 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. For Letter A, until 2021, the group will “minimized its taxation by declaring its sales in France in the Netherlands”.his customers contracted with a Dutch company.

“Between 2019 and 2020, Netflix Services France”which already boasted 7 million subscribers in France, has paid out “only 981,000 euros in income tax”.. After this financial arrangement was abandoned in 2021, Netflix’s declared sales in France jumped from 47.1 million euros in 2020 to 1.2 billion euros”.

Abuse?

Looking ahead to fiscal 2021, “tax officials intend to verify whether (…) Netflix has not continued to improperly minimize its profits.”explained Letter A. In particular, it cited the discrepancy between “microscopic operating marginof less than 2% to be generated by the platform in France in 2021, and that of its American parent company, of 20%. “this gap has persisted into 2022”.the year in which the company “paid only 6.5 million euros in profits”.. “By re-invoicing a large part of its sales to other Netflix entities abroad.”the company 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 posted sales of $9.82 billion in the third quarter of 2024, for a net profit of $2.4 billion. In France, the group has just celebrated the tenth anniversary of its arrival, declares over 10 million subscriber households and assures compliance with French regulations by complying with obligations to invest in creation, paying VAT at the full rate as well as the CNC contribution of 5.15% of sales.

Netflix asserts that it has invested “250 million euros in French production in 2023, including “50 million in cinema. Among his greatest successes in France, “Lupin”starring Omar Sy, launched in 2021 and reached “the top 10 most-watched series in 70 countries”.the platform boasts.