Netflix offices in Europe raided in tax fraud probe

US streaming giant investigated for alleged cover-up of financial crimes including ‘off-the-books work’, source says

Netflix’s offices in Paris and Amsterdam were raided by French and Dutch authorities on Tuesday as part of a tax fraud investigation.
Specialist financial investigators searched “various locations” in France in connection with allegations of “covering up serious tax fraud and off-the-books work” as part of a probe that has been running since 2022, a judicial source told news agency AFP.
The US streaming giant’s Amsterdam headquarters for Europe, the Middle East and Africa was also searched by a team of officials from both France and the Netherlands.
“French and Dutch authorities have been co-operating on this criminal case for many months,” the source added.
It comes after reports emerged last year that Netflix was under investigation in France for its tax filings for 2019, 2020 and 2021. In response, the firm insisted that it complied with tax law in all countries where it operates.
La Lettre, a French media outlet, reported that Netflix’s French operation was structured so that all subscribers were signed up with a Dutch subsidiary – thereby “minimising its tax bill” – until 2021.
It paid less than €1 million (£840,000) in taxes in Paris across 2019 and 2020, when it had around seven million French subscribers.
Authorities are now trying to determine whether Netflix made illegal attempts to minimise its reported profits and thereby its tax bill, La Lettre added.
The French subsidiary reported very low operating margins compared to Netflix’s US operation in 2021 and 2022, the outlet said, paying just €6.5 million (£5.5 million) in tax on its profits in 2022.
However, its practice of billing a large share of revenue to entities outside France represented a “tax optimisation strategy that is legal” under certain conditions, La Lettre added.
Netflix launched in France just over 10 years ago and now has over 10 million subscribers in the country. 
Last year it said it spent €250 million (£210 million) producing French content, of which €50 million (£42 million) went into feature films. 
The company said it complied with local laws on commissioning French content, paying the full rate of VAT and contributing to a film industry levy.
Its top French-made output includes the Lupin series starring Omar Sy. The show is a modern reimagining of the classic early-1900s tales of “gentleman thief” Arsene Lupin by writer Maurice Leblanc – France’s answer to Sherlock Holmes.
Netflix earned more than $9.8 billion (£7.5 billion) in revenue globally from its 282 million subscribers from July to September this year, with net profit reaching $2.4 billion (£1.8 billion).
The company has been contacted for comment.