Netflix offices have been raided in France and the Netherlands as part of a preliminary investigation into tax fraud laundering, a French judicial source said.
Investigators specialising in financial crime and corruption searched the US streaming giant's offices in central Paris on Tuesday morning.
Dutch authorities were simultaneously searching the company's European headquarters in Amsterdam, according to the French source.
The French investigation was opened in November 2022 and was carried out by the Parquet National Financier (PNF).
The PNF is a special financial crime prosecution unit known for pursuing high-stakes white-collar probes that often involve large international companies.
"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 Netflix spokesperson told Reuters.
The office of the Dutch prosecutor for financial crime declined to comment and referred questions to the PNF.
A preliminary investigation in France does not imply criminal charges and does not necessarily lead to a trial.
It was not immediately clear what prompted the investigation.
Scrutiny from tax authorities
Large tech companies often run into difficulties with European tax authorities when offering online services and subscriptions across borders.
News website La Lettre reported last year that Netflix's French subsidiary became the subject of scrutiny from tax authorities over its low reported turnover, which the outlet said was at odds with paying user numbers in the country.
La Lettre said Netflix Services France paid less than 1 million euros ($1.6 million) in corporate taxes between 2019 and 2020 by involving a separate unit registered in the Netherlands.
The news site added the company stopped the practice in 2021.
Corporate records reviewed by Reuters showed the revenue of Netflix's French unit surged to around 1.2 billion euros ($2 billion) in 2021 from 47 million euros ($77 million) the year before.
Netflix in France did not respond to a request for comment on the alleged reporting of revenues through Amsterdam rather than France and the PNF declined to give details on the scope of its investigation.
In 2022, Netflix agreed to settle a tax dispute with Italy by paying 55.8 million euros ($91.9 million).
Netflix said on its website it opened its Paris office, located just around the corner from the Opera Garnier, in 2020 and employed around 40 staff.
The company produces most of its original films and series, including the global blockbuster Emily in Paris, by working with third-party contractors.
Reuters
