Netflix offices in France and Netherlands raided in tax fraud investigation

On Tuesday, French and Dutch authorities searched Netflix's offices as part of a probe launched in November 2022 into suspected financial misconduct, including alleged "serious tax fraud and off-the-books work." The investigation, led by France's Parquet National Financier (PNF), which typically examines major corporations, seeks to uncover potential discrepancies in Netflix’s reported revenues in France.

Investigators specializing in financial crime conducted the search in Paris, while authorities in Amsterdam, where Netflix’s European headquarters are located, also cooperated with the French team in a synchronized raid. A Dutch official confirmed that the operation was requested by French authorities, demonstrating close international collaboration in the investigation. “Cooperation between French and Dutch authorities has been underway for months as part of these proceedings,” a French source informed Reuters.

Netflix responded with a statement, saying, “We are cooperating with the authorities in France, where Netflix is a significant contributor to the local economy, and we comply with the tax laws and regulations in all the countries in which we operate.”

The exact reason behind the investigation has not been disclosed, but French news sources reported concerns over Netflix Services France’s low revenue turnover in relation to its significant local user base. In 2021, Netflix adjusted its operational structure to manage tax filings differently, following reports that its French subsidiary had previously declared less than €1 million in corporate taxes by channeling revenue through a Dutch entity. In recent years, European tax authorities have encountered similar challenges in collecting tax revenue from large tech companies with cross-border services, which often maintain complex international structures for tax purposes.

Previously, Netflix faced scrutiny from Italian tax authorities, which resulted in the streaming giant paying €55.8 million in back taxes in 2022. Netflix opened its Paris office in 2020, where it employs approximately 40 people.