A new report claims Netflix has moved up to $430 million of profit from its international operations into tax havens in 2018.
No Tax and Chill, produced by investigative think tank Tax Watch UK, puts Netflix among a growing list of digital companies that are using offshore companies to move their tax liability.
“In 2018, despite making $1.2 billion in worldwide profits and booking an estimated £860 million in revenue from its 10 million strong UK subscribers, the company paid no tax in the UK. On the contrary, the company received £924,000 back from the UK taxpayer in 2017/18 in tax credits,” says the report.
It gives the example that when Netflix began its UK operations in 2012 it did so through a Luxembourg company. When Netflix Luxembourg was set up in late 2011, the company did not have any customers in Luxembourg and the company published its accounts in British Pounds. In 2015, just after the company started selling subscriptions in Luxembourg, Netflix moved its European operations to Amsterdam and a Dutch company, Netflix International BV.
It’s so-called “International Streaming” segment made a loss every year between 2011 and 2018, when it entered the black.
Up to 2017, US corporations were theory subject to US federal taxation on their worldwide profits. But the corporations were able to permanently defer paying taxes if they re-invested those profits overseas. This had lead to a series of investments in government bonds and marketable securities.
However, this must be viewed against a background increased UK production including Sex Education, Outlaw and The Crown that have all been filmed in the UK. And last year Netflix confirmed it was taking 14 stages at Shepperton Studios.
In a statement released to Broadband TV News, Netflix said: “Corporate taxation is an important and much-debated issue. 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”.
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No Tax and Chill, produced by investigative think tank Tax Watch UK, puts Netflix among a growing list of digital companies that are using offshore companies to move their tax liability.
“In 2018, despite making $1.2 billion in worldwide profits and booking an estimated £860 million in revenue from its 10 million strong UK subscribers, the company paid no tax in the UK. On the contrary, the company received £924,000 back from the UK taxpayer in 2017/18 in tax credits,” says the report.
It gives the example that when Netflix began its UK operations in 2012 it did so through a Luxembourg company. When Netflix Luxembourg was set up in late 2011, the company did not have any customers in Luxembourg and the company published its accounts in British Pounds. In 2015, just after the company started selling subscriptions in Luxembourg, Netflix moved its European operations to Amsterdam and a Dutch company, Netflix International BV.
It’s so-called “International Streaming” segment made a loss every year between 2011 and 2018, when it entered the black.
Up to 2017, US corporations were theory subject to US federal taxation on their worldwide profits. But the corporations were able to permanently defer paying taxes if they re-invested those profits overseas. This had lead to a series of investments in government bonds and marketable securities.
However, this must be viewed against a background increased UK production including Sex Education, Outlaw and The Crown that have all been filmed in the UK. And last year Netflix confirmed it was taking 14 stages at Shepperton Studios.
In a statement released to Broadband TV News, Netflix said: “Corporate taxation is an important and much-debated issue. 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”.
broadbandtvnews
