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Netflix: Tax Affairs
03 February 2020
Lead MP
Margaret Hodge
Debate Type
Adjournment Debate
Tags
EconomyTaxation
Other Contributors: 4
At a Glance
Margaret Hodge raised concerns about netflix: tax affairs in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Opened the debate
Thank you for selecting the debate, Mr Speaker. I have spent a decade campaigning against corporate tax avoidance and argue that Netflix is avoiding taxes through loopholes while receiving public funds via high-end TV tax relief. The company’s UK profits should be taxed here but instead are shifted to tax havens. Other countries like France and Brazil are implementing measures to collect taxes from digital companies, indicating the need for similar action in the UK. I urge the Government to include streaming services in the Digital Services Tax and adjust eligibility criteria for tax credits so that they reflect revenue earned within the UK.
Jim Shannon
Alliance
Strangford
Netflix's use of loopholes to avoid paying taxes is disgraceful, given that last year Netflix UK subscribers paid £700 million. The government must close these loopholes.
Newcastle upon Tyne North
It's vital we get tax policy right so that companies like Netflix make their fair contribution to public services, especially given the austerity measures reducing funding for essential services.
Ian Paisley Jnr
DUP
North Antrim
While acknowledging concerns about tax avoidance, it's important to note that Netflix has invested over £400 million in the UK and is creating jobs and fostering diversity in film-making.
Stalybridge and Hyde
Netflix's argument regarding intellectual property developed elsewhere does not hold up when considering that much of its content creation takes place in the UK, funded by tax credits.
Government Response
I thank the right hon. Member for Barking for calling this debate on an important topic that is of great public interest. The UK taxes multinational companies based on profits attributable to economic activities here, which means revenues alone are not a useful indicator of tax payments. However, the Government recognise and take robust action against profit diversion to low-tax jurisdictions through measures like the diverted profits tax and ORIP rules introduced in 2019. Internationally, we have supported OECD efforts to reform profit allocation rules for digitalised businesses. Regarding creative sector tax reliefs, the UK continues to support these industries through eight sector-specific reliefs that have significantly contributed to economic growth. The minister highlighted Brazil's withholding tax as an example of existing measures to tackle tax avoidance and noted that the Digital Services Tax is a temporary measure pending broader international agreement. Finally, he emphasised the importance of HMRC’s scrutiny of large businesses.
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