PARIS: French and Dutch authorities raided streaming giant Netflix’s offices in Paris and Amsterdam on Tuesday as part of a tax fraud probe, a judicial source said.

The search of “various locations” in France by specialist financial investigators relates to suspicions of “covering up serious tax fraud and off-the-books work” and is part of a probe opened in November 2022, the source said.

Netflix’s Amsterdam headquarters for Europe, the Middle East and Africa was also targeted for a search by a team of officials from both France and the Netherlands.

“French and Dutch authorities have been cooperating on this criminal case for many months,” the source said.

Dutch prosecutors confirmed the searches “in the context of a French legal assistance request”, while the European Union agency for Criminal Justice Cooperation (Eurojust) said it was “supporting the investigations” including Tuesday’s searches.

Netflix is under investigation in France for its tax filings for 2019, 2020 and 2021. Netflix insisted last year that it complies with tax law in all countries where it operates, after the probes were revealed in a media report.

French outlet La Lettre A had reported that Netflix’s French operation was structured until 2021 so that all subscribers signed up with a Dutch subsidiary — thereby “minimising its tax bill”.

That left it paying less than one million euros ($1.1 million at today’s rates) in taxes to Paris across 2019 and 2020, when it had around seven million French subscribers.

Authorities are now trying to determine whether Netflix kept up illegal attempts to minimise its reported profits and thereby its tax bill, La Lettre A added.

The French subsidiary reported very low operating margins compared to the US mothership in 2021 and 2022.

Published in Dawn, November 6th, 2024