Netflix to begin declaring true UK revenue amid tax controversy
Netflix has announced that it will begin to declare its true UK revenue from next year.
It comes after ongoing criticism about the amounts of tax paid by the streaming service, including by US President-elect Joe Biden.
Think tank Tax Watch says Netflix’s UK holding company, Netflix Services UK, declared £43million revenue in 2018, though its true revenue was likely to be somewhere around £860m.
The discrepancy comes as Netflix’s Netherlands-based company, Netflix International, collects a large share of revenue from UK subscribers to the streaming service.
A spokesperson for Netflix told the Guardian: “As Netflix continues to grow in the UK and in other international markets we want our corporate structure to reflect this footprint,” a Netflix spokesman told The Guardian. “So from next year, revenue generated in the UK will be recognised in the UK, and we will pay corporate income tax accordingly.”
According to a recent report by Deadline, Netflix paid just 9.5 percent of its income in taxes last year.
Calling out Netflix as well as Amazon in a recent tweet, Joe Biden said that “hardworking Americans should not be paying more in federal income taxes than Amazon or Netflix.”
He added: “It’s time for big corporations to finally pay their fair share.”
Responding to Biden’s comments, a Netflix spokesperson cited the company’s financial statements, saying: “Netflix paid US federal taxes in 2019 and is reporting a significantly higher effective tax rate so far in 2020.”
Earlier this year, Netflix was accused of “superhighway robbery” over its tax payments. The comments came from Dame Margaret Hodge, who said the streaming service was taking taxpayers “for a ride” as it gained £1m in tax reliefs in the last two years.
“We are actually handing over cash to Netflix while they stash their profits offshore,” she said. “It is time to stop the ‘something for nothing’ aggressive tax behaviour of these big companies. I say enough is enough. These tax abuses must stop.”
Source : Will Richards Link