Netflix Inc. (NFLX) will be investigated by Italy over Tax IssuesAuthor: Viraj ShahLast Updated: October 4, 2019 Streaming giant Netflix Inc. (NFLX) has come under the scrutiny of Italian authorities who are cracking down on multinational corporations. The authorities are going after foreign firms that evade tax in the country.Netflix didn’t file its tax returnsAccording to the Italian authorities, Netflix did not file its tax returns, even though it has a significant footprint in the country. A Milan tribunal recently said that the company is involved with fiber optic cables as well as servers because of which it should be paying Italian taxes. Some people familiar with the matter revealed details of the on the condition of anonymity.Italy believes that multinational corporations based in the country are not paying their adequate share of taxes. In May this year, Kering SA, the owner of Gucci was forced to shell out 1.25 billion euros to settle its tax liabilities. The company evaded taxes between 2011 and 2017. The case may now also include the payments made to individual managers as well.MasterCard Inc., the global payments giant, is one of the companies that is undergoing a compulsory tax audit in the country. The Italian financial police raided the offices recently.What is happening at Netflix?According to local newspaper Corriere Della Sera, the company is being investigated by relevant authorities to check if it’s evaded taxes. Netflix released a statement later, writing, “Netflix is closely working with Italian tax authorities, we pay all the taxes due in Italy and other countries. Netflix invests millions of euros in Italian production, thus contributing to creating jobs and sustaining the local creative community.”In recent years, Google parent Alphabet Inc. and Amazon.com Inc. have also been forced into paying their fair shares of taxes by the Italian tax regime. The total payments made by American companies in Italy now go over several hundred million euros.Netflix has gained a large customer based around the world very rapidly. It already covers about 30% of the available market in Germany, Sweden, Norway, Denmark, Finland, and the UK. There is more space for the company to expand its offerings in other parts of the world. It is also busy creating more localized content for its audience to bring more users to its platform.Other streaming platforms are giving a tough competition to Netflix at the moment, specially the likes of Disney+, a service that would be bringing new shows as well as pre-existing Disney content to the viewers. Interestingly, Netflix is experiencing a drop in its US customer base while its overseas audience is growing.