Payroll taxes, income taxes on the employees, property taxes, and VAT on the employee's spending. Just saying generally that it's fine to have a business with employees in a jurisdiction even if the company is doing business elsewhere. Outside of this context, it's also a net win for the state if the business operates, employs people, and pays above said taxes, but doesn't manage to turn a profit provided it is a continuing operation.

Now, all that said, I don't think subsidiaries should be able to use licensing agreements and other loopholes to move revenue to eliminate profit and reduce corporate tax. To me the solution is just to disallow any movement money related to intangibles (payments or license fees) unless the exchange is a bona fide transaction between unrelated parties. These subsidiaries in different jurisdictions are all entities owned by the same holding co's. It's like selling your brother a house for $1 (or more like the use of your last name for $1 Billion).

Sure, and those are all benefits to the company that enable it to make profits elsewhere, but that doesn't mean it's making any profits in the UK. (Though you could make the reverse of the upthread argument about charges between sister companies, that this suggests the British subsidiary is undercharging the subsidiaries that are making money.)

And in that case, both the company and the employee pay substantial income taxes.

Did you read the article? The whole point is that the companies do not pay the income tax by routing revenue through other countries offering tax cuts

I read the article; it says nothing about income tax. It talks about corporate tax, which gets into the reasonably debatable issue of "if you serve from country X and users are in country Y..." If you have no legal nexus in a country, it's a lot more reasonable to pay no tax in that country.

If you have employees in a country, then you necessarily will pay income tax in that country.

(Also, https://news.ycombinator.com/newsguidelines.html .)

I thought the point of the new tax was that Google pays next to no tax in Europe. Can you explain the current income taxes Google pays now?

That's probably why they built it in the UK and not in Belgium or any other EU country with insane taxes for that matter.