In a groundbreaking move, the Indian government is planning to impose taxes on Netflix Inc’s income generated from streaming services within the country, according to sources cited by the Economic Times on Friday. The draft order from the tax authorities indicates that an income of approximately 550 million rupees ($6.73 million) has been attributed to Netflix’s Indian permanent establishment (PE) during the assessment year 2021-22.
The tax officials justified their decision by pointing out that Netflix, a U.S.-based company, has stationed some employees and infrastructure from its parent entity in India to support its streaming services. As a result, this establishment qualifies as a permanent establishment, thus subjecting Netflix to tax liability in India. This marks the first instance in which India intends to tax foreign digital companies that offer electronic commerce services to Indian consumers.
The Economic Times’ sources further revealed that the move is part of the government’s broader efforts to regulate and tax foreign digital service providers operating within the country. By taxing the income earned by these companies, the government aims to ensure that they contribute their fair share to the Indian economy.
Netflix has yet to respond to requests for comments on this matter.
(Reports)
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The Chenab Times News Desk
