Netflix has a legal issue in France. Deadline reports the Netflix France and the Netherlands offices have been raided amid an investigation into alleged tax fraud and concealed employment.
“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,” a spokesperson for the streaming said in response the publication’s reporting.
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International publications have reported that the National Financial Prosecutor’s Office and the Central Office for the Fight against Corruption and Financial and Tax Offenses raided in the streaming giant’s French HQ in the Paris’s 9th arrondissement on Nov. 5 as part of a preliminary investigation opened in November 2022 for “laundering of aggravated tax fraud” and “concealed work in an organized gang”.
As for what sparked the investigation, a reported 2022 tax audit. It was discovered that Netflix’s declarations for France between 2019 and 2020 unfounded sketchy revenue, suggesting it had “operated tax optimization techniques.”
The international newspaper’s findings uncovered Netflix Services France paid $1.06M (€981,000) in taxes on profits for the 2019-20 fiscal year and have since seemingly abandoned tax optimization strategies, with its declared local turnover ratcheting up accordingly, from $51.3M (€47.1M) in 2020 to $1.3B (€1.2B) in 2022.
The goal of the investigation was to determine how the alleged tax fraud began. Netflix’s European division has reportedly been cooperating for months with French and Dutch investigators.
The news comes amid Netflix’s launch of a new feature. The streaming giant is adding a new feature on its app that allows users to share their favorite clips of shows and movies directly to social media. Launching on Netflix’s iOS app with Android to follow, Moments is a new mobile feature that lets members save, rewatch and share their favorite scenes across Netflix titles, Variety reports.