The Income Tax department is seeking to tax Netflix on the income it earned through the streaming services in India, reported The Economic Times. In a draft order, the tax department has attributed an income of about ₹ 550 million to the company's Indian permanent establishment in the assessment year 2021-22.
This will be the first time a foreign digital company that provides electronic commerce services to customers will be taxed by India. The Income Tax department has said that Netflix has some employees and infrastructure in the country. However, the presence is as an secondment from the parent compay which leads to a PE and tax liability.
India has been mulling over digital tax to regulate digital economy and to ensure that foreign companies pay taxes on the revenue they earn in the country.