Netflix India's Earnings Under Scanner Of Tax Officials

India is seeking to tax Netflix Inc's income earned from streaming services in the country, According to an Economic Times report. In a draft order, the tax authorities attributed an income of about 550 million rupees ($6.73 million) to Netflix's Indian permanent establishment (PE) in the assessment year 2021-22, added the Economic Times report.

The ET report stated, this is the first instance in which India will tax foreign digital companies that provide electronic commerce services to customers. The reasoning behind this move by tax officials is that Netflix has stationed some of its employees and infrastructure from the parent entity in India to provide support for its streaming services. This has led to the establishment of a permanent presence in India, which in turn creates a liability for taxes.

The move is part of India's efforts to regulate the digital economy and ensure that foreign companies pay taxes on the revenue they earn in the country. The Indian government has been discussing the introduction of a digital tax for some time now, and this action against Netflix could be seen as a test case for future taxation of other foreign digital companies.

Netflix did not issue any official statement yet on the matter.