Netflix Faces Tax Fraud Investigation as Offices in France and Netherlands Raided

Investigators searched Netflix’s offices in France and the Netherlands on Tuesday as part of an ongoing tax fraud investigation led by France’s Parquet National Financier (PNF), a specialized financial crime prosecution unit. This probe, which began in November 2022, seeks to uncover potential financial misconduct in Netflix’s European operations.

A Netflix spokesperson confirmed the company’s cooperation, stating, “We comply with tax laws and regulations in all the countries in which we operate.”

The investigation involved simultaneous raids by French financial crime experts at Netflix’s Paris office and Dutch authorities at the company’s European headquarters in Amsterdam. The PNF and Dutch prosecutors have worked together for months on the case, although details regarding the investigation’s specific focus remain undisclosed.

Netflix’s financial reporting practices have been under scrutiny since last year, with reports suggesting its French subsidiary’s turnover appeared disproportionately low compared to its subscriber base. La Lettre previously reported that between 2019 and 2020, Netflix’s French subsidiary paid less than 1 million euros in corporate taxes by funneling revenue through a Netherlands-based unit, a practice Netflix reportedly halted in 2021. Following this change, Netflix’s French revenue spiked from 47 million euros in 2020 to 1.2 billion euros in 2021.

This investigation follows a similar tax case in Italy, where Netflix settled by paying 55.8 million euros in 2022.