Netflix to begin declaring revenue in the UK after tax haven accusations
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Netflix will have to start declaring its U.K. revenues after facing criticism for allegedly structuring itself to avoid taxes with the help of overseas tax havens.
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According to The Hollywood Reporter, Netflix will have to start declaring its U.K. revenues, forecast to be roughly $1.7 billion in 2021, to British tax authorities. Because the money from subscriptions in the U.K. will now be officially recognized, it can therefore be officially taxed.
The move comes after the streaming giant was called out by British think tank Tax Watch UK, which issued a report examining whether the company structures its international businesses in order to avoid taxes.
"In total, we estimate that the company moved between $327.8m to $430m in profits to low tax jurisdictions from its international operations. … there is little doubt that Netflix has structured itself to avoid paying tax, and evidence from the company’s US filings suggest that the company is moving money from its international markets into tax havens," Tax Watch said in the report.
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The structure is similar to other big multinational tech companies and the recent move will likely put pressure on other tech giants like Google, Amazon and Facebook which, The Hollywood Reporter noted, may have similar revenue redirection to overseas tax jurisdictions.