Paris, France – French and Dutch authorities conducted raids on Netflix offices in Paris and Amsterdam as part of a collaborative investigation into alleged tax fraud, according to French judicial sources. The investigation, which began in November 2022, focuses on potential tax evasion and unreported earnings by the global streaming giant.

Netflix, headquartered in Los Gatos, California, has yet to comment on the raids directly, but the company reiterated its commitment to adhering to tax laws in every region it operates. The office in Amsterdam, Netflix’s European headquarters, oversees operations across Europe, the Middle East, and Africa.

The investigation in France is being led by the National Financial Prosecutor’s Office (PNF), a specialized unit responsible for handling high-profile financial crimes. Officials from the PNF are reportedly scrutinizing Netflix for allegedly “covering up serious tax fraud and off-the-books work.” The inquiry includes examining Netflix’s tax filings for 2019, 2020, and 2021, years during which the company is suspected of minimizing reported profits to reduce its tax burden in France.

Authorities in the Netherlands conducted simultaneous searches at Netflix’s Amsterdam office, working closely with French investigators. Officials from both countries have been coordinating efforts for months, according to French judicial sources.

The investigation was initially prompted by concerns that Netflix may have shifted revenue from France to the Netherlands, allowing it to benefit from more favorable tax arrangements. French media outlet La Lettre reported last year that until 2021, Netflix declared its French-generated revenue in the Netherlands, effectively lowering its tax payments in France. After changing this practice, Netflix reported a sharp increase in revenue in France, jumping from €47.1 million ($51.3 million) in 2020 to €1.2 billion in 2021.

However, the authorities are now investigating whether Netflix continued efforts to limit reported profits after 2021. If confirmed, such actions could indicate an ongoing strategy to minimize tax obligations.

Netflix launched its streaming service in France over a decade ago, opening a dedicated Paris office in 2020. Since then, the company has garnered around 10 million subscribers in the country, according to AFP news agency, making it one of the largest streaming platforms in the region.

The outcome of the investigation could have significant implications, as European governments have been increasing pressure on tech giants to ensure fair tax practices. The European Union has previously taken steps to address tax loopholes and boost transparency, particularly concerning companies with multinational operations that generate significant revenue from European consumers.

This investigation marks one of the latest moves by European authorities to address concerns about tax evasion by large technology firms. Depending on the findings, Netflix may face financial penalties or be required to alter its financial reporting practices in the region. The developments also come amid a broader push by European governments to standardize corporate taxation and prevent revenue shifting across borders.

As the U.S. elections approach, economists largely agree that a victory for Donald Trump could weaken the euro against the dollar. The single currency has already fallen more than 2% in the month leading up to the vote, reflecting increasing concerns about a Trump win. Analysts warn that if Republicans achieve a “red sweep” by securing full control of Congress, the euro could potentially fall to parity or below against the dollar.

One of the primary mechanisms for this shift would be Trump’s proposed tariffs on foreign goods, including a potential 60% tariff on Chinese imports and a 10% tariff on products from other nations. Economists caution that such tariffs would likely drive inflation in the United States, as the cost of imported goods rises and companies pass these costs onto consumers. This inflation could prompt a more aggressive stance from the Federal Reserve, which may need to raise interest rates to combat price pressures linked to the tariffs.

In contrast, Europe could face a slowdown in economic growth due to the U.S. protectionist policies, potentially prompting the European Central Bank (ECB) to adopt a looser monetary policy to support its economy. If the Federal Reserve raises interest rates while the ECB eases, the interest rate differential could lead to a stronger dollar, further pressuring the euro.

In addition to tariffs, a Trump administration may also implement stricter immigration policies. This reduction in available labor could push wages higher as companies compete for workers, contributing to inflation and reinforcing the Federal Reserve’s need for tighter monetary policy. Such developments would likely bolster the dollar and disadvantage the euro.

Luca Santos, a foreign exchange analyst at ACY Securities, noted that a Trump victory could result in policy changes aimed at boosting U.S. economic growth, leading to a stronger dollar as investors anticipate a favorable climate for U.S. assets. Similarly, Georgette Boele, Senior FX & Precious Metals Strategist at ABN Amro, highlighted the impact of Trump’s trade policies on the dollar, pointing out that recent polling changes have heightened volatility in the dollar ahead of the election.

Strategists at BBVA predict that if Trump wins, especially with a full Republican Congress, the euro could drop below $1.08. Conversely, they foresee a weaker dollar should Vice President Kamala Harris win the election. Goldman Sachs offered one of the most pessimistic forecasts for the euro, suggesting it could weaken by up to 10% under Trump’s policies, potentially bringing it below parity with the dollar.

Historically, the initial months of Trump’s presidency saw the dollar strengthen, with the euro declining from $1.10 to $1.0340 by early 2017. However, as Trump’s economic agenda faced delays and eurozone growth improved, the euro later appreciated against the dollar.

While a drop to euro-dollar parity is not certain, renewed U.S. protectionism, rising inflation, and diverging central bank policies could all significantly influence the euro’s trajectory in the coming months, particularly if tariffs adversely affect European exports. Investors are closely monitoring these developments as the election draws near.

In response to Chancellor Rachel Reeves’ recent announcement of a 1p cut in draught beer duty, Kyle Hamilton, manager of the Flying Duck pub in Ilkley, is giving away a penny with every pint sold. Hamilton set up an honesty box at the bar for patrons to take a penny after each purchase, although he expressed skepticism that the duty cut would significantly impact drink prices.

The duty reduction was unveiled during Reeves’ budget announcement on Wednesday, part of a broader strategy to stabilize public finances. However, Hamilton criticized the move as “nominal,” suggesting it would not translate into noticeable savings for consumers.

“I don’t think consumers are necessarily going to see that penny directly,” Hamilton said. “But we are putting an honesty box at the bar where people can help themselves to a penny after every pint they buy. They can feel it that way, but on a large scale, it’s a very nominal effect.”

In discussing the budget, Hamilton noted that other measures, such as an increase in employers’ National Insurance contributions and a rise in the minimum wage, would have a more substantial effect on small businesses like his own. “A lot of pubs are struggling as it is,” he remarked, pointing to changing drinking habits and the ongoing cost-of-living crisis as significant challenges.

To keep the Flying Duck afloat, Hamilton is employing various strategies, including brewing beer on-site and hosting live music and quiz nights. Despite the financial challenges, the pub is committed to community support. Their upcoming beer festival from November 8-10 will not raise funds for the pub itself but will benefit local children’s football teams. The event will feature free brewery tours, live music, and rock ‘n’ roll bingo throughout the weekend.

The budget changes also include an increase in the National Insurance rate that employers pay, rising from 13.8% to 15% on earnings above £175 starting in April. Additionally, the threshold for employers to start paying the tax will decrease from £9,100 to £5,000 annually. Despite these increases, Chancellor Reeves announced an extension of the Employers Allowance, allowing businesses to claim back more from their National Insurance bill, raising it from £5,000 to £10,500.

The expected rise in National Insurance contributions is anticipated to generate £24 billion, accounting for over half of the total tax increases outlined in the budget. As pubs like the Flying Duck navigate these changes, Hamilton’s penny offer reflects both a playful gesture and the tough reality many in the hospitality sector face.