Corporate

Income Tax Department Seeks To Tax Netflix’s Earnings In India: Report

The income tax authorities have reportedly attributed about Rs 55 crore income to Netflix’s Indian PE in the assessment year 2021-22

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Netflix India’s income in the country has reportedly come under the scanner of the Income Tax department of the country. As per a report, the country is mulling to tax Netflix Inc’s income earned from streaming services in the country.

According to a report in the Economic Times, the move would be the first such to tax overseas digital companies providing services to consumers in India. The income tax authorities have reportedly observed that since Netflix has a permanent establishment (PE) in India, it becomes liable to get its India income assessed for tax. 

In line with the same thought, the report adds that the income tax authorities have attributed about Rs 55 crore income to Netflix’s Indian PE in the assessment year 2021-22. 

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The officials have also reportedly reasoned that Netflix had some infrastructure and employees from the parent entity on secondment in India to support its streaming services, leading to a PE and tax liability in the country. 

The move now also comes on the backdrop of Netflix rolling out its streaming services in India in 2016 and becoming a massive hit. At present, as per the report, Netflix has over 6 million subscribers in India.

As far as Netflix’s subscribers go, some time back, the company did face some heat due to declining numbers across several countries. Post this, the company also said that it would take steps like no password sharing and others, to ensure that its subscriber count and revenue don’t dip. 

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