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The “Netflix Tax” is approved in Switzerland

Streaming content platforms shall pay 4% of their incomes in order to foster the audiovisual production of such country.

At the beginning of June 2021, the Council of Swiss States approved the “Netflix Tax”, which requires audiovisual content platforms to invest at least 4% of their revenues in the local film production. That way, it sets a worldwide precedent, since it is the second country in allocating part of its revenues from a “streaming giant” to the national cinema. The first was Poland in 2020, imposing a rate of 1.5% within its region, for the Benefit of the Polish Film Institute. The new tax is part of a law which demands that 30% of the platforms’ audiovisual content be of European production.

On its part, the Spanish Government has been planning, since 2020, a levy of 5% which would finance European audiovisual contents in general. Around 70% of the amounts collected would be provided to European independent audiovisual producers, who shall produce their contents in the official languages of their countries. In turn, Spain has achieved this year that Netflix pays more taxes and charges its clients from its Spanish branch, instead of collecting from the Netherlands.

Swiss authorities fear that the strategy of content platforms not to lose their profits might be to increase the users’ subscription fees, causing them to assume the costs of promoting local work. It is important to highlight that this occurs in a context where the G7 is planning to apply a 15% tax on global corporations. Probably, the first precedent of this type of policy is the one of Norway, the first country to apply a tax on Netflix in 2011, the same year in which the platform started to produce audiovisual contents of its own. Towards 2020, having a Netflix account in Norway cost 80% more than in many other countries of the world. Moreover, countries like Iceland, Russia, South Korea, Israel, Australia and France have charged taxes to this streamer in the defense of their national production.