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French and Dutch financial authorities raided Netflix offices as part of a long-running investigation into possible tax fraud and labor law violations.
The offices of the American streaming giant in Paris and Amsterdam were raided on Tuesday morning by investigators, including those of the French Central Office for the Fight against Corruption and Financial and Tax Crimes (OCLCIFF). They were accompanied by members of the National Financial Prosecutor’s Office (PNF), according to two people familiar with the matter.
These searches were part of a preliminary investigation opened in November 2022 which focused on potential “aggravated tax fraud, money laundering and labor law violations”, according to one of the people interviewed.
No charges have yet been brought and preliminary investigations in France do not necessarily mean there will be a trial.
A criminal cooperation effort between French and Dutch authorities is underway as part of this investigation, coordinated by Eurojust, the European Union agency for criminal judicial cooperation, the source added.
Netflix and the financial prosecutor’s office declined to comment.
The other person said the searches appeared linked in part to Netflix’s use of the Netherlands to book subscription revenue from France between 2019 and 2021, through its main European subsidiary in Amsterdam.
The investigation is also expected to include its arrangements since 2021, when Netflix’s French subsidiary began receiving local subscription revenue but later paid a fee for the right to provide streaming services in France to its headquarters in the Netherlands. -Down.
Two years ago, France carried out a tax audit of the company concerning these arrangements. French media outlet La Lettre first reported on the tax audit last year, saying Netflix’s reported annual revenue in France fell from 47.1 million euros in 2020 to 1.2 billion euros. euros in 2021 after the cessation of booking revenue in the Netherlands.
Sources close to Netflix said the company had fully cooperated with the audit and that the group had said in the past that it complies with tax laws in all countries where it operates.
France is one of Netflix’s largest European markets, with more than 10 million subscribers in the country two years ago, and is home to a host of popular programs, including the hit series. Lupine.
French financial prosecutors have targeted other large multinationals operating in France for alleged tax optimization practices. American fast food giant McDonald’s paid a fine of 1.25 billion euros in 2022 to avoid criminal prosecution for tax fraud as part of an agreement with the French justice system. Investigations into the practices of the consulting firm McKinsey are also underway.
