Google revealed, in its last financial release, that it paid just £6 million in tax to the U.K. authorities despite the fact the web giant’s British operation turned over £395 million in 2011. Now the company is facing heat from the government, with a Labor MP of the Treasury Select Committee (an inner group in government responsible for some fiscal policy) condemning Google’s low tax rate as “entirely immoral.” Google’s executives are likely be pulled before the Committee to explain their actions.
Google’s British wing is run as a subsidiary of its Irish section, making the most of Ireland’s low tax rates which are designed to spur high tech innovators to choose to base themselves in the nation (resulting in Dublin earning, to some, the status of Europe’s silicon valley). Google has defended its tax payments as being within U.K. law.
Google rival Apple faced deep criticisms recently for pulling a so-called “double-Irish, with a Dutch sandwich” tax maneuver that also results in the company paying reduced tax in the U.S.