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Netflix Under Investigation in Italy for Alleged Tax Evasion

Netflix is under investigation for alleged tax evasion in Italy.

Although the U.S. streaming giant does not have offices or other sorts of physical presence in Italy, prosecutors in Milan have opened a preliminary probe of the company on the basis that the computer servers and cables it uses constitute a digital infrastructure that makes their revenues taxable under Italian law, the Milan-based daily Corriere della Sera reported Thursday.

No Netflix executives are under investigation.

“Netflix has been working closely with the Italian tax authorities,” a Netflix spokesperson said in a statement late on Thursday, confirming an Italian press report.

“We pay all the taxes due in Italy, and other countries around the world. Netflix invests millions of Euros in Italian productions – helping to create jobs and support the local creative community,” the spokesperson added.

Corriere della Sera said on Thursday that Milan prosecutor Gaetano Ruta is working with Italy’s fiscal police to determine whether revenues from Netflix’s estimated 1.4 million Italian subscribers can be considered subject to Italian taxation, even though it operates out of the Netherlands.

Italy has recently passed a media law that applies European legislation obligating foreign streaming services such as Netflix and Amazon Prime Video to invest 30% of their revenue in local productions.

Milan prosecutors have recently probed other U.S. tech giants such as Apple, Amazon and Facebook and collected a reported €5 billion-plus in back taxes for Italian government coffers. But these companies all have physical offices in Italy.

 

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