According to reports from Bloomberg and Reuters, the investigation has been opened by prosecutors in Milan after the U.S. company failed to file a tax return this year.
Despite the fact that Netflix has no official physical presence in Italy, the prosecutors are arguing that the streamer’s infrastructure, including servers and cables that deliver content to some 1.4 million users, qualify it as a local business and thus it should pay taxes.
No Netflix executive is under investigation. Milan prosecutors have previously probed US companies Apple, Amazon and Facebook over tax issues.
Italian news outlet Corriere della Sera first reported the investigation.
The streaming service issued the following statement in response to reports of the investigation: “Netflix has been working closely with the Italian tax authorities. We pay all the taxes due in Italy, and other countries around the world. Netflix invests millions of Euros in Italian productions – helping to create jobs and support the local creative community.”
Earlier today, Netflix announced that its profits in the UK had increased 37% over the last 12 months.