UK watchdog blames Google for blatant tax evasion

Internet giant Google has been accused of evading the taxes by the UK government.

The MPs have accused the company of failing to pay the 'fair share' of taxes and reduce its liabilities of its business in UK, reports the Independent.

According to the report, the Public Accounts Committee (PAC) has asked HM revenue and customs (HMRC) to investigate why Google dodged the taxes when it generated revenue of 18 billion dollars between 2006-11 but paid only 16 million dollars in corporation taxes.

However, Google insists that it did not evade taxes and followed the rules as its sale of advertising space to UK clients was carried out in Ireland.

PAC said that corporate firms have been using loopholes in the legislation to their advantage to evade the taxes and ordered HMRC to question Google about its claims.

The report said that PAC considers accounting firms also responsible for the 'elaborate corporate construct' to find ways of evading 'fair taxes'.

Chairman of PAC, Margaret Hodge said that Google's reputation has been damaged and it will only be repaired if the company agrees to pay taxes to the government of the country where it earns profit from the business.

However, Google spokesperson defended the company and said that it complies with the tax laws of UK, which are formed by the politicians and claimed that PAC wants international companies doing business in UK to pay more but that is not what the rules are, the report added.