US streaming service Netflix has agreed to settle a tax dispute with Italy, the company and legal sources said on Friday.
Milan prosecutors released a statement saying they had settled with a multinational video-on-demand streaming company for a period from October 2015 to 2019 and demanded it pay 55.8 million euros ( around 460 crore rupees).
They gave the settlement figure without specifically naming the company involved, but three sources familiar with the matter confirmed it was Netflix.
A Netflix spokesperson said the company was pleased the deal was finalized.
“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.
The prosecution had opened an investigation for potential tax evasion three years ago.
They claimed that Netflix should have paid taxes in Italy because it relied on digital infrastructure to deliver content to 2 million users in the country.
As a backdrop to the payment deal, Netflix has now opened an office in Italy, establishing a base in Rome and hiring more than 40 employees.
The investigation by Milan prosecutors, who argued that the cables and computer servers used by Netflix amounted to a physical presence in Italy, was triggered by checks carried out by the Italian tax police.
In the past, Milan prosecutors have investigated other US tech giants such as Apple, Amazon and Facebook for dodging taxes, allowing Italy to collect billions of euros in fines and tax payments.
© Thomson Reuters 2022