Netflix Could Be Forced To Pay Taxes India Operations
The Indian government is considering imposing a tax on the revenue that Netflix generates within the country from the sale of streaming services. According to the Economic Times, the tax authorities credited an income of approximately 55 crores (US$ 6.73 million) to Netflix’s Indian permanent establishment (PE) in the assessment year 2021-22 in a draft order.
Because of this action by the income tax department, India would become the first country in the world to levy taxes on overseas digital enterprises that provide customers with services related to electronic commerce.
Netflix is believed to have a permanent establishment (PE) in India, which implies the corporation could be subject to corporate income tax, as well as any associated fines and interest costs.
This is because Netflix has employees and infrastructure on secondment from its parent company in India to support its streaming services. This creates a permanent establishment (PE) in India, which makes Netflix liable for tax. In the assessment year 2021-22, Netflix’s Indian PE will earn approximately 55 crores, according to the draft regulation.
Netflix has over 6 million customers in India, which makes the country a big market for the corporation. The decision to start taxing the company might have huge repercussions for other foreign digital companies that are already functioning in India.