This story was originally published on the Benzinga India portal.
India reportedly wants to tax the global streaming giant Netflix Inc.’s NFLX Income in the country, a first for an international digital consumer company.
What happened? The Income Tax Agency is seeking a share of the streaming service’s revenue in India, the Economic Times reported, citing sources.
According to the report, the government agency estimated the income from the company’s India facility at US$7.3 million in the 2021-22 tax year.
Tax officials argue that the US-headquartered company has to pay taxes in the country because it has some infrastructure and employees seconded from its parent company operating in India, the report said.
Why it matters: With over 6 million subscribers in India and estimated gross revenue of $200 million in fiscal 2021, Netflix faces stiff competition from Disney+ Hotstar, Amazon Prime, Sony Liv and Jio Cinema.
Netflix bet on it Subscription Fee Reductions in the country to attract price-conscious Indian consumers.
However, streaming competition is intensifying in the country as more rivals join the fray. Reportedly market leader Disney+ Hotstar lost almost 8.4 million subscribers in the last six months.