US streaming service Netflix has agreed to settle a tax dispute with Italy, the company and legal sources said on Friday.

Milan prosecutors issued a statement saying they had settled with a multinational video on-demand streaming company for a period covering Oct. 2015 to 2019 and asked it to pay EUR 55.8 million (roughly Rs. 460 crore).

They gave the settlement figure without specifically naming the company involved but three sources with knowledge of the matter confirmed it was Netflix.

A Netflix spokesperson said the company was pleased to have the matter finalised.

“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.

Prosecutors had opened an investigation into potential tax evasion three years ago.

They claimed Netflix should have paid taxes in Italy because it relied on digital infrastructure to stream content to 2 million users in the country.

As a backdrop to the payment agreement, Netflix has now opened an office in Italy, setting up a base in Rome and hiring more than 40 employees.

The investigation by Milan prosecutors who argued that cables and computer servers used by Netflix amounted to a physical presence in Italy, had been triggered by checks conducted by Italy’s tax police.

Milan prosecutors in the past have probed other US tech giants such as Apple, Amazon, and Facebook for dodging taxes, allowing Italy to net several billion euros in fines and tax payments.

© Thomson Reuters 2022


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