• Cliff Equity
  • Posts
  • 📈 Netflix’s Tax Drama: France and Dutch Investigate

📈 Netflix’s Tax Drama: France and Dutch Investigate

Trump Victory Spurs Dollar and Bitcoin Surge

November 06, 2024

This is Cliff Equity, the UK’s business newsletter that keeps you informed on what’s important in tech, business and finance in less than 5 minutes

In today’s stories:

  • Netflix’s Tax Drama: France and Dutch Investigate

  • Trump Victory Spurs Dollar and Bitcoin Surge

  • NatWest Offloads ÂŁ11bn Pension Risk

The summary: Netflix's tax savvy ways have caught the eye of French and Dutch authorities, raising eyebrows over just how much revenue the streaming giant may have "kept on the down-low" before its recent financial transparency glow-up.

The details:

  • French and Dutch authorities have raided Netflix's offices in Paris and Amsterdam as part of a tax fraud investigation that has been quietly brewing since late 2022.

  • Netflix, headquartered in Amsterdam for its EMEA operations, stands accused of "serious tax fraud" and "off-the-books work" by the French National Financial Prosecutor’s office.

  • French reports claim Netflix previously kept its French revenue under wraps in the Netherlands until 2021, after which its reported French turnover miraculously leapt from €47.1m to €1.2bn.

  • While Netflix has yet to comment on the raids, it assures all is above board tax-wise — but French and Dutch investigators may have a different screenplay in mind.

Why it matters: Netflix’s tax tango has sparked intrigue because it highlights how global giants might exploit loopholes to keep the taxman at bay, even in markets they dominate. The sudden surge in Netflix’s French revenue figures post-2021 suggests a shift from clever accounting to something a tad more transparent—or perhaps just less obvious. With France and the Netherlands now keen on a deeper look, Netflix’s strategy to "comply everywhere" may need a bit more fine-tuning to avoid future spotlights.

The summary: Trump's re-election has spurred market shifts, with rising dollar and Bitcoin values, renewed trade tensions, and potential for inflationary policies, leaving investors braced for heightened volatility amid key economic decisions in the US and China.

The details:

  • The US dollar and Bitcoin have surged following Donald Trump's re-election, with Bitcoin reaching a record high of $75,371.69, as markets anticipate tax cuts, increased tariffs, and potential inflation under his leadership.

  • Major stock indices in the US, Japan, and Australia have rallied, with US indices poised for strong openings, reflecting market optimism around Trump's pro-business and tax-cutting agenda.

  • Trump's plans to intensify tariffs, particularly on China, and his isolationist stance in foreign policy, have raised concerns in Asia, especially regarding Taiwan's security and the impact on global trade.

  • Investors are bracing for a potentially volatile period with upcoming announcements from the US Federal Reserve on interest rates and China’s plans to counter its economic slowdown, adding further tension to the markets.

Why it matters: Trump’s re-election and his pro-business, protectionist stance could reshape global markets, driving up the dollar and sparking inflation that may lead to higher interest rates. His policies on trade, particularly with China, heighten tensions in Asia and could disrupt key sectors like technology. As investors await major decisions from both the US Federal Reserve and Chinese officials, markets may experience heightened volatility in the days ahead.

The summary: NatWest’s £11bn pension deal with Rothesay is the latest in a string of savvy moves by UK firms offloading pension risks, turning the retirement game into a high-stakes, low-risk business.

The details:

  • NatWest has sealed the UK's biggest-ever pension outsourcing deal, shifting ÂŁ11bn of pension liabilities to Rothesay, the company behind England cricket’s Test match sponsorship.

  • This “buy-in” move insures roughly a third of NatWest’s ÂŁ33.6bn retirement fund, aiming to shield pension benefits from demographic and investment risks – members’ payouts remain unchanged.

  • With over 190,000 pension members, NatWest joins a growing list of major UK firms using pension risk transfer (PRT) deals to manage long-term pension risks.

  • Pension risk deals are booming, with RSA, Boots, and the Co-operative Bank among those jumping in – it’s a fast-growing, lucrative corner of finance.

Why it matters: NatWest’s massive pension deal signals a shift as companies scramble to safeguard retirements without bearing the full financial risk themselves. By transferring billions in pension liabilities, they’re saying “let’s leave the heavy lifting to the pros” – a relief for trustees and retirees alike. Plus, with heavyweights like Rothesay and Legal & General snapping up these deals, pension schemes are now as much about finance as they are about future security.