The New York Times reported that “Google reported sales of more than $4 billion in Britain last year…” but “paid less than $10 million in taxes.” Google VP for North and Central Europe Matt Brittin told a UK parliamentary panel that “We pay the tax we are required to pay in every country in which we operate.”
Where taxable transaction occur on the Internet is always a challenge since the Internet business may be in California, the server in another state or country, and the purchaser an a different location. The New York Times added this complexity:
Google says that most of the economic value it creates is generated in Silicon Valley, where its engineers toil away at the computer algorithms behind its search engine and other services. So the company says it is fair that most of what it pays in taxes goes to the United States Treasury, not its foreign counterparts.