Jobaaj Stories
Indian Central Government is to place a tax on Netflix streaming service’s income earned in the country.
This is the first time country will levy a tax upon some foreign digital company for providing streaming services to customers. The reason behind it is that the U.S based entertainment company had a permanent establishment in the nation which is required to be taxed.
As per some reports, Netflix Entertainment earned a gross revenue of Rs. 1,529.36 crores from India. In a recent interview, Monika Shergil shared that total viewing hours increased 30% from the previous year while its revenues got increased by 25%. India has contributed to a very high net subscriber base in 2022 which followed an aggressive price plan.
In a draft order, authorities have attributed an income of about 550 crores rupees to Netflix’s Permanent Establishment in India in the assessment year 2021-22. However, India has raised its concerns over its right to tax digital revenues in its Jurisdiction. Where, As per the Organisation for Economic Co-operation & Development, aim to address such issues as taxing digital companies like Netflix.
Netflix started streaming service in India in the year 2016 and has reached 6 million subscribers by now. Across the globe, the company offers a wide variety of content which include regional and Hollywood movies, Tv-shows, documentaries, etc. It generates its revenue through its application via Netflix subscription.
In case the draft is passed as an order, then companies like Netflix will have to pay taxes in those countries in which they operate, which will increase their tax liability to certain numbers. It even can make it difficult for such companies to operate in India and other countries with the same proceedings.
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