Netflix accused of avoiding UK corporation tax
Investigation finds sales booked in Luxembourg
A Sunday Times investigation has found that Netflix paid no UK corporation tax last year despite being estimated to have around 4.5m subscribers in the UK.
According to the paper, it generated an estimated £200m of revenue in Britain last year but any profits from the UK in 2014 were booked overseas. There is no suggestion that Netflix has broken the law.
The paper reported that latest accounts for Netflix International BV, which was based in Luxembourg until the end of last year, show a net turnover of £415m and profits of £11.3m in 2014, with British customers accounting for the largest proportion of turnover. It says the company paid income tax in Luxembourg of £573,396, equivalent to a rate of about 5%.
The company says it is in “expansion” mode and is making overall losses on its international operation. A spokesman said its British subsidiary employs about 12 people and will pay some corporation tax this year, adding: “We are fully compliant with all applicable rules.”
Ethical Consumer's own investigation, carried out in 2013, found that the company was booking UK sales in Luxembourg. Receipts issued to paying subscribers said that the subscription fees were paid to Netflix Luxembourg S.à r.l.
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