According to media reports, the Indian government is looking to tax Netflix Inc's domestic income.
In a draft order, the tax authorities attributed an income of about USD 6.73 million (INRR 55 crore) to Netflix's Indian permanent establishment (PE) in the assessment year 2021-22.
Tax officials stated that a PE and tax liability was established as the US firm had some employees and infrastructure from the parent entity on secondment in India to support its streaming services, the Economic Times reported.
Therefore, Netflix is liable to have its income generated from the country assessed for tax, it was concluded.
The move is the first time India will tax overseas digital companies.
For Netflix, India is an important market as the country contributed the highest net subscriber additions to its global tally in 2022. This was driven by the launch of an aggressive pricing plan in December 2021, original Indian content and licensed movies.