Netflix will find itself facing a large tax bill when it finally launches in France on September 15.
According to Le Figaro, the Centre national du cinéma et de l’image animée (CNC) has extended the tax imposed on VOD and SVOD operators to those that are based abroad.
As a result, those with annual sales of €10 million and above will be required to pay a 2% levy, starting from January 2015.
The move follows strong demands from French operators for a level playing field, arguing that foreign competitors such as Netflix and Amazon, located outside the country, could escape taxation.
It has also been made possible by an OECD decision requiring companies to pay VAT in the countries where they provide services rather than are based.
The VOD market in France is currently worth around €245 million a year, while Netflix has a turnover of around €300 million in the European countries it is already present in.
Neflix’s objective is for 10% of French homes to receive its services in the next 2-5 years.
This would provide it with annual revenues of around €300 million in the country.
