Netflix’s Australian tax bill was $868,000 last year

Netflix paid just $868,000 in tax in Australia last year, despite estimates it raked in hundreds of millions of dollars from subscribers in the country.

Filings with the corporate regulator show Netflix Australia turned its first profit in Australia in 2021 as the benefits of prolonged COVID-19 lockdowns drove subscribers to its hit programs such Squid Game, Bridgerton and Ozark. The filing with the Australian Securities and Investments Commission shows Netflix eked out a $1.5 million profit after tax in 2021, on the back off $30.7 million in revenue, up 49 per cent from a year earlier. Its tax bill grew from $554,000 to $868,000.

However, these figures do not take into income from Netflix’s Australian subscribers, which analysts estimate could total 6 million. Australian Netflix users are billed by the company’s Netherlands-based entity. A Netflix spokesperson said: “We have filed our financial statements as required.”

Last year’s figures represent the last time Netflix will not account for Australian subscriber revenue. From January 1, 2022, Netflix Australia will bill its customers onshore, a decision it said reflected ongoing growth in the country.

The revenue currently recorded by Netflix Australia is related to back office services such as payment processing, engineering support and content delivery support.

Telsyte’s 2021 Australian Entertainment Subscription Study suggests the streaming giant has about 6 million local subscribers. Based on pricing packages ranging from $11 to $20 per month, Netflix could be generating as little as $850 million from Australian subscribers, or as much as $1.6 billion.

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Netflix Australia first opened a local office in 2019, which has expanded as it begins to invest in local content and to work with the government on regulation in the sector. The company appointed its first head of Australian originals – Que Minh Luu – in 2020 and has since created several local programs such as Clickbait and Byrons Baes to the global slate. The government is currently considering imposing a local content quota on Netflix and its competitors, which includes Stan (Stan’s parent company Nine owns this masthead).

Globally, Netflix is suffering. More than $54 billion was wiped from Netflix’s market value last month when it revealed it had shed subscribers for the first time in a decade.