India’s IT department looking to tax Netflix’s India operations

(Reuters) – India is seeking to tax Netflix Inc’s income earned from streaming services in the country, the Economic Times reported on Friday, citing people familiar with the matter.

In a draft order, the tax authorities attributed an income of about 550 million rupees ($6.73 million) to Netflix’s Indian permanent establishment (PE) in the assessment year 2021-22, the report added.

Tax officials reasoned that the U.S. firm had some employees and infrastructure from the parent entity on secondment in India to support its streaming services, leading to a PE and tax liability, the publication reported.

The move is the first time India will tax overseas digital companies providing electronic commerce services to consumers, the people told to ET.

Netflix did not respond to a Reuters’ request for comment.

($1 = 81.7800 Indian rupees)

(Reporting by Urvi Dugar in Bengaluru; editing by Uttaresh Venkateshwaran)