Highlights:
- Netflix was under investigation for potential tax evasion since it relied on digital infrastructure to provide content to Italian subscribers.
- From October 2015 until 2019, the payment will include taxes, penalties, and interest.
- As part of the payment deal, Netflix has established an office in Italy, creating a base in Rome and recruiting more than 40 people.
Netflix, the US streaming service, has agreed to resolve a tax dispute with Italy, according to the company and legal sources on Friday.
Prosecutors in Milan published a statement claiming they had reached an agreement with a worldwide video-on-demand streaming company for the period October 2015 to 2019 and ordered it to pay EUR 55.8 million.
They did not name the company involved in the settlement, but three sources with knowledge of the situation verified it was Netflix.
According to a Netflix spokesperson, the company is grateful to have the problem resolved.
“We have maintained constant dialogue and cooperation with the Italian authorities and continue to believe that we have acted in full compliance with Italian and international rules,” the spokesperson said.
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Prosecutors began looking into alleged tax evasion three years ago.
They said Netflix should have paid taxes in Italy because it depended on digital infrastructure to deliver content to the country’s 2 million consumers.
Netflix has opened an office in Italy as part of the payment agreement, creating a base in Rome and hiring more than 40 employees.
Tax police investigations in Italy prompted the inquiry by Milan prosecutors, who considered Netflix’s use of cables and computer servers amounted to a physical presence in Italy.
Prosecutors in Milan have already investigated other US internet giants such as Apple, Amazon, and Facebook for tax evasion, allowing Italy to earn several billion euros in penalties and tax payments.
