Unlike Stan, Foxtel, Presto or Quickflix who actually bill customers GST and pay tax, Netflix is not even billing customers for GST instead they are stripping millions out of the Australian economy straight into their tax haven coffers.
The issue has upset several consumers who have taken to social networks to vent their disgust at the US Companies actions.
The Company is also allowing consumers to access their US content via a VPN connection knowing full well that the Australian rights for the content are not held by Netflix but by free to air TV stations, Stan, Presto and the Foxtel arch rivals to Netflix.
On the Mumbrella forum one reader wrote “The fact is that Netflix runs two alternate subscription bases worldwide, one in the local territory and another via VPN’s”
“People all over the world and not just Australia are using the VPNs and this suits Netflix. And again Netflix Australia is a foreign registered company with a domicile I think in Ireland. So it is really just another tax evader, no GST, no corporate taxes.”
“If it got 300,000 subscribers that is $27million/annum in GST the Federal government doesn’t receive, and unlike free to air and PAYTV it has no Australian content obligations whatsoever”.
“The Producer Association is piss weak in welcoming them. It should be berating them as a rogue operator with little intention to contribute to the local industry”.
A labor politician told ChannelNews “Netflix are just another US Corporate bastard who like Apple and Google want to strip as much as they can from the Australian market. TheAbbott Government needs to tackle this issue head on”.
Another reader called Phillio wrote “I don’t understand why articles like this skirt around the real issue”
“Netflix don’t care who/what/where someone accesses their content from, as long as they pay for it. The truth is, Netflix ONLY geoblock their content to appease the content owners and their backward regional based approach to content rights. If they could let everyone have full access to their libraries tomorrow, they would”
Nick Bartlett wrote “Dole bludgers, single mothers on welfare and Netflix are the ones responsible for Australia’s fiscal challenges”.
Fairfax Media who are a part owner in Stan a streaming competitor to Netflix wrote ‘The giant American global corporations do not lack gall. The idea that they should recycle a fair share of their profits back into the communities where they operate is not a concept embraced byNetflix.
Apple, Google and others who have become notorious for shifting profits between subsidiaries and claiming absurdly low levels of profit in Australia as a percentage of their turnover here. It is legal but it is also cynical. We can now add Netflix to the list of cynical operators.
Netflix entered the Australian market on Tuesday. It is operating with the advantage of not having to charge its customers GST because it is not a “local entity”. Netflix is selling its on-demand, video- streaming service for a monthly subscription price of $8.99 for use on one device. (Using multiple platforms costs more.).
This price is $1 a month less than its local competitors, whose customers are paying GST. The price advantage just happens to be almost exactly equal to the GST that Netflix is not charging, and which its local competitors, Presto and Stan, are charging. This is absurd tax policy.
Fairfax went on to say that Companies like Netflix, have for years have been shifting revenue into low-tax havens around the world, which has helped their profitability and their growth.
They said that Fairfax Media is a competitor of Netflix and while there is commercial self-interest in criticising the advantage Netflix has over Australian-based companies, the argument and the principle remain the same with or without Fairfax Media in the mix.
Australian companies that pay corporate taxes in Australia, and whose customers also pay GST to the federal government, should be entitled to compete on an even playing field without the Australian government giving an advantage to foreign companies simply because they are foreign-based.
Attempts to discuss the issue with Reed Hastings the CEO of Netflix, who has been strutting his stuff in Australia this week were blocked by Netflix PR Company Pulse.