French and Dutch authorities have conducted raids on Netflix’s offices in Paris and Amsterdam as part of a tax fraud investigation, according to French judicial sources. Officials from both countries have collaborated closely since the investigation began in November 2022, focusing on Netflix’s tax compliance practices within Europe.
Although Netflix has not commented on the specifics of the raid, the company maintains that it follows tax laws wherever it operates.
The Amsterdam office serves as Netflix’s headquarters for its operations across Europe, the Middle East, and Africa, making it central to the investigation. In France, the probe is led by the National Financial Prosecutor’s Office (PNF), which specializes in investigating high-profile financial crimes.
Authorities are scrutinizing Netflix for suspected “serious tax fraud and off-the-books work,” which may involve complex financial practices potentially designed to reduce tax liability.
The investigation targets Netflix’s tax filings from 2019 to 2021, with both countries’ authorities carrying out coordinated searches to assess Netflix’s financial declarations over these years. French officials confirmed that cooperation between France and the Netherlands has been ongoing for several months.
The scope of the investigation suggests a concerted effort to determine if Netflix’s tax strategies meet compliance standards across its European operations.
Reports from the French media indicate that Netflix may have minimized its French tax payments by declaring revenue generated in France to its Dutch office until 2021. According to the media outlet La Lettre, this arrangement kept reported turnover in France relatively low until it was abandoned.
Following the change, Netflix’s declared annual revenue in France surged dramatically from €47.1 million in 2020 to €1.2 billion in 2021, raising questions about previous reporting practices.
Investigators are examining whether Netflix continued to engage in profit-minimization strategies after this shift. The large discrepancy between the previously reported and recent revenue figures has drawn attention from tax authorities. The investigation could reveal whether the company adjusted its practices significantly or continued similar strategies under new structures.
Netflix entered the French market over a decade ago and opened a dedicated Paris office in 2020. With an estimated 10 million French subscribers, Netflix’s significant presence in the country has increased scrutiny of its financial practices, especially as governments aim to ensure fair tax contributions from multinational corporations. This case is likely to have broader implications for tech giants operating across multiple jurisdictions.
