Amidst content diversification, Netflix faces tax burden globally

18 . Aug . 2017
Reading Time: 1 minute

While Netflix plans to increase its budget by $1 billion, making it a whopping $7 billion now, its audiences the world over have been or are gearing up to pay more for the subscription service under ‘Netflix taxes’.

Australia and Canada already tax Netflix. Costa Rica’s Government is also planning to introduce a 13-15 percent value-added tax (VAT) on entertainment streaming services. A similar tax has already been introduced or proposed in New Zealand, Russia, Brazil, and EU countries. Luckily, there is no tax on Netflix in India, even after GST has been implemented in the country.

In USA, many states are already taxing Netflix, while many more are contemplating to tax the streaming and digital entertainment in an attempt to make up for the declining sales taxes and other revenue shortfalls.

Chicago, Pennsylvania, Washington, Florida and North Carolina tax digital goods. And Alabama, Illinois, Louisiana, Maine and West Virginia are eager to join the list.

Netflix has voiced its opinion on this move. Jonathan Friedland, Chief Communications Officer, Netflix said in a media interaction that this is a dangerous precedent to start taxing Internet apps and websites using laws intended for utilities like water and electricity. Netflix has more than 50 million U.S. subscribers.