Netflix made hundreds of millions of dollars from Australian customers in 2021. But his tax bill was tiny compared to his earnings.
Netflix paid less than $1 million in taxes in 2021 despite making hundreds of millions of dollars from Australian customers.
According to filings with the Australian Securities & Investments Commission (ASIC) as disclosed by The Sydney Morning Herald, Netflix’s local tax bill totaled $868,000. It reported a $1.5 million profit from $30.7 million in revenue related to back-end operations such as payment processing.
The real pinnacle of Netflix’s revenue — subscriber subscription revenue — was not subject to Australian tax because local subscribers were billed through a Netherlands-based entity.
The Netherlands is a low tax jurisdiction and Netflix accounting is legal. SMH Netflix said it intends to bill Australian customers through Australia from January 2022.
While Netflix doesn’t disclose region-specific subscriber numbers outside of North America, industry analyst Telsyte estimates that Netflix has six million members in Australia.
With the cheapest Australian subscription at $10.99 per month and a maximum of $22.99 per month, six million accounts would yield between $791 million and $1.65 billion in revenue.
Netflix has ramped up its local commissions since its first Australian title, the widely viewed supernatural drama wadden seastarring Elsa Pataky, in May 2017.
The streamer has since released controversial reality series Byron Baeswhich angered locals over fears of how popular holiday town Chris Lilley’s would be portrayed crazy peopleanimated function Back to the hinterland and documentary Puff: Miracle of the Reef.
It has work in progress a heartbreak high Reboot, the dramedy with Celeste Barber Wellmania and Jessica Watson biopic true spirit.
Australia has also hosted a number of Netflix titles that were co-produced with the US.
There was the thriller series clickbaitwhich was filmed in Melbourne but contained an American story and an American lead.
Coming up is the action feature directed by Elsa Pataky interceptordirected by Australian writer Matthew Reilly, who adapted his own book, although it was understood interceptor was commissioned by the US team.
Melissa McCarthy series God’s favorite idiot Filmed early episodes in north NSW before production ended unexpectedly early. The remaining episodes are expected to be filmed later in the US.
Netflix and other international streamers like Amazon Prime Video and Disney+ have been actively investing in Australian productions while trying to resist government interference in the market.
Local production interests and artists have lobbied for a mandatory quota whereby international entertainment companies would be required to invest a percentage of their earnings in Australian television and films.
Globally, Netflix has endured a tumultuous few months, with its stock price plummeting 70 percent year-to-date and losing tens of billions of dollars in value.
The company announced in April that it recorded a net loss of 200,000 subscribers in the first three months of the year and will lose another 2.5 million in the current quarter. The news prompted a sell-off in shares as investors worried about the company’s long-term growth trajectory.
As a result, Netflix executives committed to making drastic changes to its operating model.
Netflix said it would introduce a cheaper ad-supported membership tier by the end of the year and crack down on password sharing.
It has also begun cutting costs, including cutting the head of its animation department and several employees and projects, including the Meghan Markle series pearl.