Taxing Times For Netflix? India Aims To Cash In On Streaming Giant's Income

This story was originally published on the Benzinga India portal.

India is reportedly looking to tax global streaming giant Netflix Inc.'s (NASDAQ: NFLX) income in the country, a first for an international digital consumer company.

What Happened? The Income Tax department is gunning for a slice of the streaming service's income in India, the Economic Times reported, citing sources. 

The government agency pegged income from the firm's permanent establishment in India at $7.3 million during the assessment year 2021-22, as per the report.

Tax officials argue that the U.S.-headquartered firm is liable to pay taxes in the country because it has some infrastructure and employees on secondment from its parent entity working in India, the report said.

See also: Get Ready To Pay More: Amazon Prime Raises Subscription Fees In India

Why It Matters: With over 6 million subscribers in India and estimated gross revenue of $200 million in the fiscal year 2021, Netflix faces tough competition from Disney+ Hotstar, Amazon Prime, Sony Liv, and Jio Cinema.

Even Mukesh Ambani's Jio Cinema has emerged as a top player in the streaming market in India after acquiring rights to stream the IPL and bagging rights for HBO content in India. 

Netflix has banked on cuts to subscription fees in the country to attract price-sensitive Indian consumers.

However, the streaming race in the country is heating up as more competitors join the fray. Market leader Disney+ Hotstar reportedly lost nearly 8.4 million subscribers in the past six months.