Netflix Generating Tens Of Millions In Revenue But Paying Less Than $260K In Taxes
Netflix Australia Pty Ltd is milking millions in taxes out of Australia after it was revealed that they paid less than $260,000 in taxes in Australia on a service fee of just $6.5M in 2017.
This is not the revenues the big US multinational generated this is a service fee paid by Netflix International BV for acting as a collection agent on subscriber revenue, the revenues are in the tens of millions and on this money they are not paying taxes in Australia.
Netflix Australia Pty Ltd has declared profits of $257,959 for the year to December 31, 2017, and an income tax expense of $175,516 and while they have done everything legally questions are being raised as to whether they are acting morally in the best interests of Australia where they are gouging revenues from Australians.
The Australian Financial Review said that because Netflix International BV is not an Australian company it does not appear on the Australian Tax Office’s annual disclosure list, and the Netflix Australia (the Australian collection agent) does not meet the $100 million threshold to make the list.
This is a Company that is stripping revenue from local Companies Foxtel and Stan.
Observers claim that the Netflix payments does call into question the effectiveness of the government’s Multinational Anti-Avoidance Legislation (MAAL), which came into effect on January 1, 2016, and the Diverted Profits Tax (DPT), which came into effect on July 1, 2017.
The laws are aimed at clawing back revenue earned by multinationals such as Netflix, Facebook and Google from Australian consumers and businesses. The MAAL and DPT apply to significant global entities (SGE) with global turnover of more than $1 billion.
“All our financial practices are compliant with local and international tax laws,” a Netflix spokesman said.
Macquarie University associate professor Dr Catriona Lavermicocca said the Australian government has introduced some measures, but multinational taxation is an international problem.
“The framework for the allocation of profits between countries based on assets and their location is giving rise to anomalies,” she said.