Netflix to pay taxes on Australian subscriber earnings

Pressure is expected to increase on Google, Amazon, Facebook and other global companies that do not disclose their domestic revenues.

As Netflix continues to grow and invest in Australia, we want our company structure to reflect our business activities here. As a result, Australian members will be billed by Netflix Australia starting in the new year and Australian subscription revenue will be recognized in Australia.”

According to Australian Securities and Investments Commission filings, Netflix reported after-tax earnings of $878,234 on $20.54 million in revenue in 2020. But it only paid $550,000 in taxes in Australia, despite estimates that its domestic subscriptions made Over a billion dollars in revenue.

Netflix will not disclose how many subscribers it has in that country, but the Australian tax authorities will be aware of the figures based on the GST paid by Netflix International BV.

In September 2021, Telsyte’s 2021 Australian Entertainment Subscription Study estimated that Netflix had 6 million Australian subscribers.

Netflix is ​​offering customers three levels of membership, priced at $10.99, $15.99, or $19.99 per month as of September 2020.

Using subscriber estimates as a guideline, Netflix Australia could have earned close to $790 million and possibly more than $1.4 billion, depending on the number of subscribers in each membership tier. Netflix Australia will have to pay a fee to operate the service in the Netherlands, as it has received a fee when revenue from Australian subscribers is routed through that country.

Netflix plans to change the company’s structure in some of its international markets, with the UK and Spain moving to a local entity structure late last year and then Mexico earlier this year.

The streaming giant has also continued to offer a more transparent view of how its content is priced, launching Top10 Netflix, which breaks down the top 10 movies and TV shows by watch time. Previously, it calculated viewership by measuring the number of accounts that watched the title, and counting the number of views if a subscriber streamed a show or movie for at least two minutes.

In fiscal 2020, leading streaming entertainment services, including Netflix, invested nearly $270 million in Australian content, according to the inaugural Australian Content Investment Report from Australia’s SVOD in August.

The number included Australian content and products related to Australia, including shows that were filmed here but not filmed in the country, such as Netflix’s Click defeat. This was a $50 million production, filmed in Melbourne, with its showing in the United States.

Netflix local originals include replay high heartbreakYouth drama series Gymnastics Academy: A Second Chance!, The true story of Jessica Watson real goalFish Out of Water, Drama Series disrespectable in the drama Survive in the summer.

Nine, owner Australian financial evaluation, owns the subscription video-on-demand service Stan, a local competitor to Netflix.