Police and fraud investigators conducted raids on Netflix's offices in Paris and Amsterdam as part of an ongoing investigation into potential fraud. Dutch authorities confirmed that their actions were in coordination with French authorities, who requested the operation.

Investigators conducted searches at Netflix offices in France and the Netherlands on Tuesday as part of an investigation into alleged financial misconduct, according to judicial sources. The probe, initiated by French prosecutors, focuses on "covering up serious tax fraud and off-the-books work" and began in November 2022, a source informed AFP.

In Paris, the investigation is led by the Parquet National Financier (PNF), France’s financial prosecutor’s office that frequently investigates major international corporations. The raid was executed by financial crime and anti-corruption specialists.

"We are cooperating with authorities in France, where Netflix plays a substantial role in the local economy, and we abide by tax laws and regulations in all countries where we operate," a Netflix spokesperson stated.

A simultaneous raid was conducted in Amsterdam, the location of Netflix's European headquarters. Emma Bosma, a spokesperson for the Dutch National Office for Serious Fraud, Environmental Crime and Asset Confiscation, confirmed that the raid took place at the request of French authorities.

"French and Dutch authorities have been cooperating for many months within these proceedings," a French source shared with Reuters.

The exact reason for the investigation remains unclear. European tax authorities often encounter challenges with large tech companies operating digital services across borders. The PNF has not disclosed details regarding its ongoing investigation.

Reports last year on a French news website suggested that tax authorities were skeptical of Netflix Services France’s relatively low reported revenue despite having a significant number of subscribers. The French subsidiary reportedly paid less than €1 million (about $1.09 million) in corporate taxes by directing a portion of its revenue through a separate unit in the Netherlands, as per La Lettre. Netflix reportedly ceased this practice in 2021.

Netflix established its Paris office in 2020, employing around 40 individuals. Previously, the streaming company faced similar scrutiny from Italian tax authorities, which was resolved with a €55.8 million settlement in 2022.