I take your point but your technical jargon is all over the place. Your first paragraph is a half truth at best - tax is generated from financial transactions (which you get wrong), but the argument is that the financial transaction is created at the moment of sale. And for what it is worth tax avoidance isn't illegal.
Because according to law, regardless of where the financial transaction takes place, where the sale was conducted is where responsibility for paying tax is established.
Why is that a problem?
So if the sales are all taking place in the UK, regardless as to whether the money changes hands via Ireland, means that Google are avoiding tax.
LB, you really are a massive geek.