February 22, 2020

Netflix pushes back against report it moved money into ‘tax havens’


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By Evio Fordham Fox Business From Yahoo Finance

Netflix is pushing back against a United Kingdom think tank’s recent report that the company is likely “moving money from its international markets into tax havens.”

“Corporate taxation is an important and much-debated issue,” a company spokeswoman told Deadline. “Ultimately, it’s for governments to decide the rules when it comes to tax — and in every country in which we operate, Netflix respects those rules.”

Tax Watch UK issued a report examining whether Netflix structures its international businesses in order to avoid taxes.

“In total, we estimate that the company moved between $327.8m to $430m in profits to low tax jurisdictions from its international operations. … there is little doubt that Netflix has structured itself to avoid paying tax, and evidence from the company’s US filings suggest that the company is moving money from its international markets into tax havens,” Tax Watch said in the report.

Tax Watch acknowledged that Netflix’s structure is “similar … to many other multi-national companies operating in the digital space,” some of which record much bigger profits than Netflix. Nevertheless, Netflix’s profits have grown from $123 million in 2015 to $1.2 billion in 2018, Tax Watch pointed out.

Netflix’s European operations are headquartered in the Netherlands and owned by an entity that is owned by Netflix Global Holdings CV that appears to have an address in the Cayman Islands, according to Tax Watch. Tax Watch added that Netflix has said the Cayman Islands entity has been retired.

Tax Watch’s report comes as Netflix and other tech companies face changes in how European countries tax them. The U.S. and France have been in conflict over a French law, passed over the summer, that imposes a 3 percent tax on digital revenue generated by large tech companies, including GoogleAppleFacebook and Amazon.

FOX Business’ inquiry to Netflix was not returned at the time of publication.

FOX Business’ Megan Henney contributed to this report.

For more on this story go to; https://finance.yahoo.com/news/netflix-pushes-back-against-report-182007288.html

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