Netflix Italia is born, what changes for subscribers and payments

Big fiscal maneuvers in Netlix's house: from 2022 Netflix Italia is born, an Italian company that will pay taxes in our country. Will it be good or bad for the users?

From 2022 in Italy there will be a new big company: Netflix. It's not a joke, but the truth if what Il Sole 24 Ore reported turns out to be correct. Netflix has been operating in Italy for several years and has over 2 million Italian subscribers, but it is not an Italian company and does not pay taxes in Italy.

It will do so starting next fiscal year, because it has decided to open (also fiscally) an Italian office as it has already done in other European countries: France, Spain and the United Kingdom. In each of these countries Netflix has had disputes from the tax authorities, always for the same reason of not paying taxes in the place where the profit is generated. So, in a mirror image of what has already happened in these three countries, in 2022 Netflix Italia will be born. But, in reality, it won't even be a brand new company because Netflix already has two companies with fiscal headquarters in Italy.

Netflix Italy: what happens in 2022

Today, all revenues generated in Italy by Netflix are invoiced by Netflix International BV, a company under Dutch law. As many already know, the Netherlands offers a tax regime that is, to say the least, favourable to multinationals that set up their European headquarters within its borders. On revenues generated in Italy, therefore, Netflix today pays very little tax, all in Holland.

Netflix operates in Italy through two Italian companies: Los Gatos Services Italia and Los Gatos Entertainment Italy. Both pay taxes totaling less than half a million euros.

From 2022, however, Los Gatos Services Italia will become Netflix Italia and will bill all revenues made by Netflix from Italian users. This means that it will pay VAT and income taxes on its Italian employees. This move would be the result of the dialogue established already in 2019 between Netflix, Guardia di Finanza and Agenzia delle Entrate: the last two, in fact, consider that Netflix has a stable organization in Italy with an essential role in generating revenues. That's why it has to pay taxes in Italy.

Netflix Italy: what changes for Italians

We have to wonder, at this point, whether the transfer of Netflix's Italian headquarters to Italy is good or bad for Italian users of the streaming platform. The answer, in theory, is that it changes absolutely nothing. In practice, however, over time it might not be entirely true.

Factually, nothing will actually change for viewers: they will be able to continue using their Netflix subscription exactly as before. Simply in the invoice they will receive every month they will find written Netflix Italia.

The doubt, however, is another: when Netflix will begin to pay all taxes in Italy will continue to offer its services at the same price? We will know not before mid-2022.