Google has a Bermuda presence that is part of a corporate structure that is enabling the Internet search engine giant to legally avoid hundreds of millions of pounds in UK taxes.

Two major names in the UK media - newspaper The Guardian and TV channel Sky News - focused on the story over the past two days.

The Guardian reported that Google was avoiding £450 million in taxes on its UK advertising.

Revenues from customers in Britain are diverted to Google Ireland Ltd., the company's Dublin-based headquarters for its European operations.

UK corporation tax is levied at between 28 percent and 30 percent, compared to Ireland's rate of 10 to 25 percent.

Google Ireland is in turn owned by Google Bermuda Ltd., according to Richard Murphy, an outspoken critic of "tax havens", who penned a piece on Google that was published on the Sky News website yesterday.

There are five Google entities incorporated in Bermuda, according to the Registrar of Companies - Google Bermuda Ltd., Google Bermuda Unlimited, Google Cable Bermuda Ltd., Google Infrastructure Bermuda Ltd. and Google PPC1 Bermuda Ltd.

Mr. Murphy described Bermuda as "a secretive tax haven where no tax need be paid on corporate profits".

"How does the profit get there? I suspect that Google Ireland pays Google Bermuda for use of Google's technology," Mr. Murphy added.

"That's fair enough - clearly Google has created something very clever. But two questions remain.

"Is that technology so good that charges for it are enough to ensure no significant amounts of tax are paid in the UK or Ireland? And is it right that Google should seem to avoid paying tax on the vast majority of its profits outside the USA as a result? Those are questions for Google to answer."

Mr Murphy added: "Latest accounts for Google in the UK are reported to show that it paid just £141,000 in tax on its profits in the UK in 2008. That's much the same as the year before. Which is very, very little indeed on UK sales of £1,648 million."

Google is far from alone among US corporate giants in basing subsidiaries in Bermuda. A report published early this year by the US Government Accountability office showed that 100 biggest corporations in America had a combined 229 subsidiaries here.

US President Barack Obama has made clear that he intends to take actions to punish US companies who use offshore subsidiaries to trim their US tax bills.

Bermuda has worked hard to shed the "tax haven" tag in signing 18 tax information exchange agreements (TIEAs) and earning a place on the Organisation for Economic Cooperation and Development (OECD) "white list" of countries deemed to be meeting international tax transparency standards.

Google's press office did not respond by press time to a request for comment.