OTTs avoid tax in Spain
August 13, 2019
From David Del Valle in Madrid
The largest streaming platforms in Spain pay little money to the Spanish Treasury. Netflix, for example – which doubled its profits in 2018 to €1.1 billion – only paid €3,100 in tax that year, the same amount as a worker with an annual salary of €24,000.
HBO paid in €45,200 in taxes in 2017. Other OTT platforms like Amazon or Sky do not pay taxes at all in Spain as they do so through their subsidiaries in London.
Both Netflix and HBO report their revenues to companies located in countries with less taxes, such as Holland in Netflix’s case, to avoid taxes in Spain. HBO, which operates in Spain under the brand of Home Box Office Spain Ventures SL, reported Spanish revenues of just €1.7 million .
Netflix, with two companies in Spain – Los Gatos Entretenimiento España SL and Los Gatos Servicios de Transmisión España SL – only reported €538,921 in revenues and a profit of €9,439, paying taxes of €3,100.
The Spanish Administration is determined to put an end to this tax avoidance by introducing a legal obligation for them to pay up to 8 per cent of their revenues (3 per cent in RTVE tax and 5 per cent in investment in European TV production) on the real number of their subscribers. In Netflix’s case it would be over 2 million subs. As for HBO, the company would pay in proportion to €40 million in revenues bearing in mind its 475,000 subscribers instead of the reported €1.7 million.
In a recent speech before the Parliament, the acting president Pedro Sánchez, said that “a well-known digital platform [alluding to Netflix] paid in Spain €3,146 in taxes. It is not the only one. This is not only unsustainable but also is in breach of the most elementary principles of responsibility and fiscal justice.”