Authorities from France and the Netherlands conducted coordinated raids on Netflix’s offices in Paris and Amsterdam on Tuesday as part of an ongoing investigation into potential tax fraud and labor law violations.
The searches, which were part of a broader probe that began in November 2022, involved investigators from France’s central office against corruption and financial crimes (OCLCIFF), alongside the National Financial Prosecutor’s Office (PNF). Dutch authorities were also involved in the raids at Netflix’s European headquarters in Amsterdam. The operation was coordinated with the assistance of Eurojust, the European Union agency responsible for cross-border judicial cooperation.
While no charges have been filed at this stage, the investigation is focused on allegations of “aggravated tax fraud laundering” and potential breaches of labor laws, specifically relating to Netflix’s financial practices between 2019 and 2021. Investigators are examining how Netflix booked subscription revenue from French customers through its Dutch subsidiary, a tax arrangement that was scrutinized during a tax audit in 2022.
According to reports, Netflix stopped declaring its revenues from France in the Netherlands in 2021, after which its reported annual turnover in France surged from €47.1 million in 2020 to €1.2 billion in 2021. The investigation is looking into whether Netflix attempted to continue minimizing its tax obligations after this change.
A Netflix spokesperson confirmed that the company is cooperating with the authorities, emphasizing that it complies with tax laws in all the countries where it operates. The French financial prosecutor’s office, however, declined to provide further comment on the matter.
Netflix, one of the largest streaming platforms globally, has been a significant presence in France, with more than 10 million subscribers. The company’s French operations are vital to its European market, with several popular programs, including the hit series Lupin, contributing to its success in the country.
The investigation into Netflix is part of a broader effort by French authorities to clamp down on tax optimization strategies used by multinational companies. Notably, fast food giant McDonald’s paid a €1.25 billion fine in 2022 to settle a tax fraud case in France, and probes into consulting firm McKinsey are still ongoing.
With input from BBC, Politico and Financial Times.
