Netflix to Pay $59 Million to Settle Italian Tax Dispute

Netflix, the popular American streaming service, has agreed to settle a tax dispute with Italy, according to the company and legal sources. Prosecutors in Milan said that they had reached an agreement with a worldwide video-on-demand streaming provider for a period spanning October 2015 to April 2019 and requested it to pay 55.8 million euros ($59.1 million) in damages. They did not name the company involved in the settlement, but three persons with knowledge of the situation verified it was Netflix.

"We have maintained constant dialogue and cooperation with the Italian authorities and continue to believe that we have acted in full compliance with Italian and international rules," the spokesperson said. Three years ago, prosecutors launched an inquiry into possible tax evasion. Netflix should have paid taxes in Italy, they contended, because it relied on digital infrastructure to distribute material to the country's 2 million subscribers.

Netflix has built an office in Italy, with a base in Rome and more than 40 staff, as a backdrop to the payment deal. The probe by Milan prosecutors, who claimed that Netflix's usage of cables and computer servers amounted to a physical presence in Italy, was sparked by tax police investigations.