Another big digital player is negotiating with the tax authorities for non-payment of taxes due. This time it was the turn of Netflix, the Californian giant that distributes paid movies and TV series in streaming, which closed the dispute with the Revenue Agency by paying approximately 55 million 850 thousand euros in a single solution. This is how the tax front is defined following the investigation by the Milan Public Prosecutor’s Office and the Milanese Gdf Economic and Financial Police Unit for failure to return income, ie for taxes not paid in Italy. In the meantime, the Group has opened an operational office in Italy since 1 January 2022.
Healed the 2015-19 period
As stated in a note signed by the Milan prosecutor Marcello Viola, the “multinational group, at the end of the tax assessment phase conducted by the Revenue Agency, proceeded with the total payment and in a single payment of € 55,850,513 by way of of taxes, penalties and interest to settle any pending with the Italian tax authorities for the period from October 2015 to 2019 “.
In the investigation, coordinated by the prosecutor Enrico Pavone – he inherited it from his colleague Gaetano Ruta, who spent a year at the European Public Prosecutor’s Office – and entrusted to the military of the Financial Economic Police Unit of the Guardia di Finanza, unlike the other Milanese tax investigations that concerning Apple, Google or Facebook, the US group led by Red Hastings is contested “a hidden permanent establishment of a foreign company operating in the digital economy”.
Stable organization without personnel
The investigations into the Netflix case, conducted by the Gdf Economic and Financial Police Unit and by the Lombardy Regional Directorate of the Revenue Agency represent “the first case, in the world, in which the existence of a hidden permanent establishment of a company is hypothesized foreign company operating in the Digital Economy, completely without staff and characterized exclusively by an advanced technological structure ». Structure that “would have been enslaved exclusively to the performance of key corporate functions for the conduct of its business in the State,” writes the Milanese Public Prosecutor.
Pm Milano: now the company pays taxes in Italy
Since last January 1st Netflix has set up a company «under Italian law which has begun to stipulate contracts and invoice the fees coming from subscriptions signed with national users. This will determine the taxation in Italy of the income produced by the sale of subscriptions to users residing in the national territory “. The Milan prosecutor Marcello Viola writes in a note.