Netflix has introduced that it’s going to start to declare its true UK income from subsequent yr.
It comes after ongoing criticism concerning the quantities of tax paid by the streaming service, including by US President-elect Joe Biden.
Assume tank Tax Watch says Netflix’s UK holding firm, Netflix Companies UK, declared £43million income in 2018, although its true income was more likely to be someplace round £860m.
The discrepancy comes as Netflix’s Netherlands-based firm, Netflix Worldwide, collects a big share of income from UK subscribers to the streaming service.
A spokesperson for Netflix advised the Guardian: “As Netflix continues to develop within the UK and in different worldwide markets we would like our company construction to mirror this footprint,” a Netflix spokesman advised The Guardian. “So from subsequent yr, income generated within the UK might be recognised within the UK, and we pays company earnings tax accordingly.”
Henry Cavill as Geralt of Rivia in season 2 of ‘The Witcher’ (Image: Netflix)
In line with a current report by Deadline, Netflix paid simply 9.5 p.c of its earnings in taxes final yr.
Calling out Netflix in addition to Amazon in a current tweet, Joe Biden mentioned that “hardworking People shouldn’t be paying extra in federal earnings taxes than Amazon or Netflix.”
He added: “It’s time for giant firms to lastly pay their fair proportion.”
Responding to Biden’s feedback, a Netflix spokesperson cited the corporate’s monetary statements, saying: “Netflix paid US federal taxes in 2019 and is reporting a considerably greater efficient tax charge thus far in 2020.”
Earlier this yr, Netflix was accused of “superhighway theft” over its tax funds. The feedback got here from Dame Margaret Hodge, who mentioned the streaming service was taking taxpayers “for a experience” because it gained £1m in tax reliefs within the final two years.
“We are literally handing over money to Netflix whereas they stash their earnings offshore,” she mentioned. “It’s time to cease the ‘one thing for nothing’ aggressive tax behaviour of those large firms. I say sufficient is sufficient. These tax abuses should cease.”