Netflix pays $59 million to settle tax dispute in Italy

MILAN — Netflix has agreed to pay more than $59 million and set up a legal entity in Italy to settle a tax dispute, Milan prosecutors said today.

The payment covers taxes, penalties and interest from October 2015 through 2019. The streaming service also established an Italian subsidiary this year, which will determine its Italian tax burden based on subscriptions to Italian residents.

Prosecutors in Milan said the investigation was triggered by the physical presence in Italy of technological infrastructure, including 350 servers, aimed at producing revenue.

Netflix welcomed the settlement that ends the case covering the tax years 2015 to 2019.

“Throughout the entire investigation, we cooperated with the Italian authorities and we continue to believe that we acted in full compliance with Italian and international tax law,’’ Netflix said in a statement.