Members of the public accounts committee described a director from Amazon as being "deliberately evasive" and displaying "outrageous" ignorance after he failed to say how much profit is generated in Britain or who owns the online retailer's Luxembourg-based holding company.
A senior figure from Starbucks, which employs more than 7,000 staff in more than 800 outlets in the UK, was told he was not believed when he claimed the coffee chain did not make profits in Britain.
An executive from Google admitted it operates in Ireland because of a low corporation tax rate there of 12.5% and was later accused by the committee chair, Margaret Hodge, of "immoral" behaviour.
Hodge told the executives that UK taxpayers are increasingly frustrated by the use of tax havens and creative accounting by large firms trading in Britain. "People want to know why companies which benefit from an infrastructure paid for by them and are paying people low wages who receive taxpayer-funded tax credits from the exchequer are not paying their fair share," she said.
Amazon avoids UK taxes by reporting European sales through a Luxembourg-based unit, MPs alleged. This structure allowed it to pay a rate of less than 12% on foreign profits last year – less than half the average corporate income tax rate in its major markets.
Andrew Cecil, Amazon's director of public policy, was accused of being "totally evasive" after failing to explain who owned the company, and was unable to detail the income made by the Britain arm of his business.
Hodge claimed the director was not a "serious person" to appear before the committee and vowed to order another senior executive to appear before it to fill in the blanks in his evidence. She asked why customers buying books through a UK website are billed from the UK and goods are delivered from UK centres but taxes are paid in Luxembourg.
Cecil said some taxes are paid in Britain. Amazon.co.uk paid £1.8m in corporation tax on more than a £200m turnover for 2011. He added that the firm was being investigated by the tax authorities in France.
Starbucks paid no corporation or income tax in the UK in the past three years, it emerged last month. The world's biggest coffee chain paid £8.6m in total UK tax over 13 years during which it recorded sales of £3.1bn.
Troy Alstead, its global chief financial officer, faced repeated claims from MPs that it engaged in aggressive tax avoidance in the UK as he tried to explain its corporate affairs. He declined to give details publicly of a favourable rate granted it in the Netherlands on a proportion of profits transferred there in the form of an intellectual property "royalty" on UK shops.
Dutch authorities wanted that to remain confidential, he claimed, prompting allegations it was a "sweetheart" deal that bosses wanted to keep under wraps.
Tory MP Stephen Barclay said a reduction in the level of that royalty from 6% of sales to 4.7% after talks with HM Revenue & Customs appeared to be merely a "cosmetic" move. It resulted in an £8m increase in corporation tax, Alstead said. He was unable to give any breakdown of how either figure was calculated.
Alstead claimed that globally Starbucks remains "an extremely high tax payer" but had failed to generate substantial UK profits. "Respectfully I can assure you there is no tax avoidance here," he said.
Asked to say what rate the firm paid in Amsterdam, where it had a roasting operation, he said tax authorities there had asked for it not to be disclosed publicly.
Google's filings show it had £2.5bn of UK sales last year, but despite having a group-wide profit margin of 33%, its main UK unit had a tax charge of £3.4m in 2011.
The company avoids UK tax by channelling non-US sales via Ireland, an arrangement that allowed it to pay taxes at a rate of 3.2% on non-US profits. It also diverts some of its profits through Bermuda.
Matt Brittin, the head of its northern Europe operation, said that Google operates in Ireland and Bermuda because they offer attractive tax rates.
"Like any company you play by the rules [and] manage costs efficiently to offer fair value to shareholders," he said.
"We're not accusing you of being illegal, we are accusing you of being immoral," replied Hodge.
All three companies have been asked to supply further information to the committee. Another Amazon executive will be asked to appear before the committee in two weeks to respond to unanswered questions, Hodge said.
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