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· Posted on
February 21, 2024

Netflix will pay tax on its Aussie subscribers from Jan 2022... and welcome to adulthood

It's estimated that Netflix earns more than $1 billion in revenue from Aussie subscribers. Cash cows, we are!

What's the key learning?

  • Netflix will convert its Aussie streaming support business to a local entity, which means subscription revenue generated here will be recognised here
  • This means Netflix will likely pay loads more tax
  • Multinational companies operating in the digital space often rort local systems by switching their corporate structures.

Background: Netflix have around 6 million Aussie subscribers...and it's estimated they earn more than $1 billion in revenue from these subscribers. Cash cows, we are!

What happened: So far, Netflix have been funnelling this revenue through a subsidiary company in the Netherlands. And so they paid a measly $550,000 in tax last year...(which doesn't sound like 30% corporate tax to us).

What else: From January 2022, Netflix will convert its Aussie streaming support business to a local entity, which means subscription revenue generated here will be recognised here...and they'll likely pay loads more tax.

So what's the key learning?

💡Multinational companies operating in the digital space often rort local systems by switching their corporate structures. 

💡It ain't against the law, but it is a loophole, and it means the Aussie economy is missing out on potentially billions in tax from big companies.

💡But now, this move could put the pressure on others like Google, Amazon and Meta to declare their local revenue here.

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