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at 2:00 pm on May 3, 2021 | 10 comments
Streaming video giant Netflix paid just $553,705 in tax in Australia in 2020, although the amount paid was up on the previous two years ($485,371 in 2019 and $341,793 paid in 2018).
The small amount of tax paid comes despite estimates that Netflix generated in excess of $1 billion in revenue from its Australian subscribers at the height of the pandemic lockdowns.
Netflix avoids paying tax in Australia by using a company structure that sees a Netherlands-based unit recognising Australian revenue, with its Australian subscribers being billed by that entity and its Australian unit paying the Netherlands unit a fee for its collection services.
Netflix reveals Australian tax bill for 2020
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Netflix paid around $550,000 in tax in Australia despite estimates it brought in more than $1 billion in revenue from its subscribers in 2020 who had little else to do during COVID-19 pandemic lockdowns than binge its television and movies.
The US-based streaming giant is slowly increasing the amount of income tax it pays locally, coughing up $553,705 for the 2020 calendar year, up from $485,371 in 2019 which was an increase on the $341,793 paid in 2018.
Netflix Australia paid $553,705 in income tax in 2020.
AP
However, the company continues to use a corporate structure allowing a Netherlands-based subsidiary to recognise Australian revenue, estimated to be between $700 million and $1.4 billion.
Netflixâs Australian tax bill revealed
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Netflix Australia paid less than $500,000 in tax for the 2019 calendar year despite more than an estimated 5 million subscribers paying at least $9.99 a month.
That is because the revenue from Australian subscribers â estimated between $670 million and $1.2 billion â flows to a Netflix company resident in the Netherlands.
Australiaâs tax system has not evolved to capture all the revenue earned by international tech companies from Australian consumers and businesses.Â
In the 2019 calendar year, Netflix Australia paid income tax of $485,371, up from $341,793 in the 2018 year, according to Australian Securities and Investments Commission filings.
In 2019, Netflix had three tiers for its streaming service: $9.99 for basic, $13.99 for standard and $19.99 for premium. However, Netflix increased the price of its premium tier in October 2019 from $17.99.