French and Dutch authorities raided streaming giant Netflix's offices in Paris and Amsterdam Tuesday as part of a tax fraud probe, a judicial source told AFP.
The US company's headquarters for Europe, the Middle East, and Africa is located in Amsterdam.
Tuesday's search by specialist financial investigators relates to suspicions of "covering up serious tax fraud and off-the-books work" and is part of a probe opened in November 2022, the source said.
"French and Dutch authorities have been cooperating on this criminal case for many months," they added.
Netflix is also under investigation in France for its tax filings for 2019, 2020 and 2021.
The investigation was opened in 2022 into charges of "aggravated tax fraud laundering" and "concealed work in an organized gang," Politico reported citing a source familiar with the matter.
The search in Paris’s 19th arrondissement was carried out by the national agency dealing with corruption and tax offenses (OCLCIFF), French publication Marianne first reported.
Authorities in the Netherlands carried out a simultaneous search of Netflix’s Amsterdam office in the presence of French magistrates and investigators, Politico reported.
The company insisted when the probes went public last year that it complies with tax law in all countries where it operates.
French outlet La Lettre A reported that Netflix's French operation was structured until 2021 so that all subscribers signed up with a Dutch subsidiary.
That left it paying less than one million euros ($1.1 million at today's rates) in taxes to Paris across 2019 and 2020.
Authorities are now trying to determine whether Netflix kept up illegal attempts to minimize its reported profits and thereby its tax bill, La Lettre A added.
The French subsidiary reported very low operating margins compared to the US mothership, the outlet said.
Netflix earned over $9.8 billion in revenue worldwide from its 282 million subscribers in July-September this year, with net profit reaching $2.4 billion.
