British members of parliament requested a tax probe into Google on Thursday, after they found out that the company had allegedly evaded paying a British corporation tax.
According to the Agence France Presse, the House of Commons Public Accounts Committee released a report that accused Google of claiming certain profits were earned in Ireland-a country with the lowest corporation tax rate in the EU-when the transactions were, in fact, performed in Britain.
Google maintained that this was not true and that their company did not avoid any taxes.
The Committee also claimed in the report that a few former Google employees informed them that some staff-based in Britain sold services.
"To avoid UK corporation tax, Google relies on the deeply unconvincing argument that its sales to UK clients take place in Ireland, despite clear evidence that the vast majority of sales activity takes place in the UK," the study reported.
The report also called for British tax agency HM Revenue & Customs (HMRC) to probe and challenge so-called "artificial tax arrangements."
"HMRC is hampered by the complexity of existing laws, which leave so much scope for aggressive exploitation of loopholes, but it has not been sufficiently challenging of the...artificial tax arrangements," the report said. "HM Treasury needs to take a leading role in driving international action to update tax laws and combat tax avoidance."
The committee found out that Google made around $18 billion in Britain during the span of 2006 and 2011, but paid only $16 million in corporation in taxes.
Google fired back, claiming that it did not break any tax laws and that companies were not to be blamed for tax law nuances. The Internet powerhouse also said that any steps taken to make the system, "simpler and more transparent," would be gladly accepted.
"We welcome the call," Google said.
