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Netflix on way to local billing?

November 24, 2020

From David Del Valle in Madrid

Netflix will start invoicing its Spanish subscribers from Spain from January in a move that will oblige the company to pay ‘real’ taxes for its ‘real’ revenues in the country, according to the Cinco Días newspaper.

Netflix has previously been billing via Netflix International BV, headquartered in Holland.

From January 2021, the company will report its full revenues to the Spanish fiscal authorities.

“It is a relevant change after hardly two and a half years in Spain and after the opening of the first European production hub in Madrid,” said a spokesman cited by the financial newspaper. The company is also moving to do the same in other countries, although no solid details have yet been revealed.

Netflix started operations in Spain in 2015, billing via its parent company in Holland for more favourable fiscal treatment. In 2018, the US streaming service reported revenues of €538,921 in Spain and a net profit of over €9,000 paying only €3,146 in taxes. Meanwhile, in Holland that year the company reported €6.5 billion of revenues from the whole European continent with a profit of €185 million paying €104 million in taxes.

Netflix’s move comes after the Spanish government passed a new TV law to oblige streaming services to pay taxes on their actual sales. It is estimated that Netflix has 4.1 million subscribers in Spain, with a market share of 43 per cent in the streaming business.

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