Netflix now bills its French customers in France. But the company has not said goodbye to its old tax optimization practices that allow it to save nearly 60 million euros in taxes.
The demonstration is made by our colleagues from Capital. Since 2021, French subscribers to Netflix are no longer billed by the Dutch subsidiary of the American giant, but indeed by Netflix Services France SAS. Since then, the revenues of this company registered in France have exploded, going from 47 million euros in 2020 to 1.2 billion in 2021. As a result, the corporate tax paid by Netflix should also have increased. . However, it is not the case.
Indeed, the tricolor subsidiary of Netflix donates 85% of its turnover to other entities, located in countries where taxation is much more attractive such as … the Netherlands. An operation which, despite changes in the law, remains perfectly legal (respecting the terms of transfers between OECD subsidiaries). So much so that Netflix France only paid 6.5 million euros in taxes last year, declaring only 22.3 million in profits (which corresponds to a margin of 2%). For comparison, in the United States, the parent company of Netflix made around 20% of operating margin before tax last year. If Netflix really played the game, the company would have paid around 65 million euros in taxes in France, according to the calculations of our colleagues from Capital.
You should also know that Netflix pays very little tax in the Netherlands, where the company manages to have very low profitability. This does not prevent the parent company from asserting its fiscal goodwill throughout the world. It recalls having notably reorganized its activities to exclude, in 2019, an entity registered in the Cayman Islands. A tax haven through which a good part of its income passed. From now on, everything is directly held by the American company, without this ultimately having an impact on the company’s tax rate. Yes, the tax laws put in place by Donald Trump in 2017, and still applied, allow American companies to repatriate the fruits of their activities abroad while only paying taxes on their American activities.
Note that Netflix France contributes in France by means other than corporate income tax alone: the company collected 240 million euros in VAT on online services last year, pays 5, 15% of its income to the CNC and must invest 20% of its national turnover in the production of European content.