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The Public Accounts Committee (PAC) said the £130m settlement "seems disproportionately small", compared with the size of its UK business.
The PAC questioned Google's European head, Matt Brittin, earlier this month.
The internet giant insisted that it paid a "fair" amount of tax following an outcry to the settlement last month.
At the time of the deal, the Chancellor described the agreement as a "great success".
The committee said it was not possible to judge whether the agreement had been fair to taxpayers, because of the lack of transparency over details of the settlement and how it was reached.
The PAC chair, Meg Hillier, MP said public anger at the agreement to cover taxes due over the past 10 years had been "palpable".
"Whether you call it secrecy or confidentiality, this lack of transparency does nothing to build confidence that big corporations are paying their fair share of tax," she added.
In its report the committee was concerned the taxman "appears to have settled for less" corporation tax from Google than other countries are willing to accept.
It called for HMRC to reopen the deal if new evidence became available as a result of investigations by other European authorities.
Earlier this month, French Finance Minister Michel Sapin ruled out striking a deal with the US company.
In its recommendations to government, the committee called on HMRC "to lead the way in pressing for changes to international tax rules to prevent aggressive avoidance by multinational companies."
MPs said the taxman seemed unable to collect "a fair share" of corporation tax from global companies in the UK because international rules were not working.
The committee said: "Google's stated desire for greater tax simplicity and transparency is at odds with the complex operational structure it has created."
MPs added that Google did not pay a penalty as part of its settlement and complex rules made it easier for large businesses to avoid being fined than the average taxpayer.
The UK is Google's second largest market after the US, contributing around 10% of Google's worldwide revenue.
A spokesperson for HMRC said in a statement: "HMRC does not settle for a penny less than is due under the law from multinationals. Last year we brought in an additional £7bn by rigorously enforcing the tax rules that apply to large businesses.
"We completely understand that there is a real appetite for as much information and insight as possible into how we pursue the tax payable by multinationals.
"We are committed to being as open and transparent as we can within the constraints of our statutory duty of taxpayer confidentiality."
There has been no response so far from Google to Wednesday's report.
An influential group of MPs has criticised an agreement between Google and the tax authority over how much the company has to pay in back taxes.

DigitalGlobe's WorldView-3 spacecraft will return pictures of the Earth's surface down to a resolution of 31cm.
Until recently, the company was restricted to selling images sharper than 50cm only to the US government.
DigitalGlobe's products will be familiar to anyone using Google or Bing maps - both run on views captured by the firm's satellites.
But its pictures also find wide application in areas such as scientific investigations, urban planning, forestry and agricultural monitoring, and in mineral exploration.
WorldView-3 is an important moment for the Longmont, Colorado-based company, however.
The market place for commercial Earth imagery is getting increasingly competitive, and being able to go to sub-0.5m resolutions gives DigitalGlobe a stand-out advantage over its rivals.
"It's important for them to be able to differentiate themselves by being able to say, 'we have the most high-resolution and highest-accuracy data available'," commented Adam Keith, the director of space and Earth observation at industry-watchers Euroconsult.
"That's a strong statement to make when there are new systems entering the market. It won't necessarily open up new markets for them, but it will certainly allow them to better serve the markets they already have."
There are still some security concerns over releasing such powerful imagery on to the open market.
The US Commerce Department, which licenses American commercial satellite imagery providers, says DigitalGlobe must wait six months before putting out any 31cm products.  This will give the authorities time to assess any unforeseen issues or sensitivities.
The current benchmark is set by DigitalGlobe's GeoEye-1 satellite, which was launched in 2007.
Its systems can deliver a 41cm capability in the panchromatic mode (essentially black and white images).
WorldView-3 is another step forward again, says Rob Mitrevski from Exelis Geospatial Systems, which designed the new satellite's optics.
He tells people to imagine putting WorldView-3 in Los Angeles and then pointing it at San Francisco - a distance greater than 610km (380 miles).
"If we had that imaging system in the 'o' of the Hollywood Sign, we could count the number of people on the Golden Gate Bridge; we could count the number of cars and the colour of the cars - probably, the year and make of the cars, as well," he says.
At the core of WorldView-3 is a large telescope with a 1.1m primary mirror.
This directs the light to instrumentation which senses a total of 29 spectral bands.
A key innovation on WorldView-3 is its CAVIS instrument, which will monitor the state of the atmosphere.
This information will be used to correct pictures when the satellite views the Earth in more challenging conditions, such as when it is hazy or there are a lot of particulates (aerosols) in the sky.
"WorldView-3 by itself can collect 650,000 sq km [of imagery] a day, and if you add in our [existing] constellation - we'll be collecting four million sq km a day. That is almost half the size of the continental United States," says DigitalGlobe's Kumar Navulur.
"To get that kind of information to the ground, we've had to implement a much higher data rate - 1.2Gbps, which is much faster than wifi networks here on Earth," adds Alex Churnushin from Ball Aerospace, which has built all of DigitalGlobe's satellites.
The difficulty then is in processing all that data, and DigitalGlobe has developed an array of automated systems to prepare the various imagery products it now sells.
"When we have the data in the memory, we can actually do millions and trillions of operations very quickly," explains Dr Navulur.
"We're leveraging gaming technologies and the computing speeds with cloud computing to start extracting information."
DigitalGlobe operates at the pinnacle of the market.  There is no publicly available imagery that is sharper (some military systems are reputed to deliver 15-20cm resolutions).
Its main competitor in Europe is Airbus Defence and Space, which has a diverse range of satellite types and can capture 70cm imagery (re-sampled to 50cm) with its Pleiades optical constellation.
Then there is a raft of smaller operators with systems that generally work at 1m and above, with one or two now providing satellite video as well.
Today, the image data market is worth about $1.5bn a year.
Euroconsult expects this to climb to about $3.6bn by 2023.
Phil Davies, whose company Deimos just launched a 75cm-capable platform, said: "What's interesting is that the market seems to be separating - into very high performance systems, such as WorldView, which are largely serving a US government market; and then other operators who are coming in with much lower-cost systems where the resolution is not as good but you still meet a lot of the market requirements."
The most powerful commercial imaging satellite ever built has just gone into orbit from California, US.

Waters stroked home after three minutes with Munns doubling the lead just after the hour mark and although Kabi Djalo's 20-yard blast tested the hosts' mettle with 12 minutes to play, the Robins weathered the storm.
Waters latched on to English Football League debutant Kyle Storer's through ball and jinked his way past Joe McNerney before sweeping to Glenn Morris' right with the first attack of the match.
Cheltenham continued to dominate but chances were at a premium with Munns rolling past the far post on 22 minutes.
Crawley improved after the restart with substitute Bobson Bawling forcing a fingertip save from Russell Griffiths, James Collins just failing to connect with Enzio Boldewijn's low centre and Djalo volleying fractionally wide.
But Cheltenham went two up when Waters had his effort headed off the line by Mark Connolly, only for Munns to slam home.
The visitors kept probing and got their reward when Bawling and Boldewijn combined to find Djalo to fire through a host of bodies from 20 yards.
Cheltenham hit the woodwork for a second time when Danny Wright collected a high free kick and nudged against the near upright late on, with the miss setting up a tense finale.
Report supplied by the Press Association.
Match ends, Cheltenham Town 2, Crawley Town 1.
Second Half ends, Cheltenham Town 2, Crawley Town 1.
Substitution, Cheltenham Town. Easah Suliman replaces Billy Waters.
Foul by Jordan Cranston (Cheltenham Town).
Enzio Boldewijn (Crawley Town) wins a free kick on the right wing.
Foul by Daniel Wright (Cheltenham Town).
Mark Connolly (Crawley Town) wins a free kick in the attacking half.
Attempt missed. Enzio Boldewijn (Crawley Town) header from the left side of the six yard box is close, but misses the top left corner.
Corner,  Crawley Town. Conceded by Aaron Downes.
Corner,  Crawley Town. Conceded by Kyle Storer.
Jordan Cranston (Cheltenham Town) wins a free kick in the attacking half.
Foul by Enzio Boldewijn (Crawley Town).
Corner,  Crawley Town. Conceded by Jordan Cranston.
Enzio Boldewijn (Crawley Town) is shown the yellow card.
James Dayton (Cheltenham Town) is shown the yellow card.
Substitution, Cheltenham Town. Amari Morgan-Smith replaces James Dayton.
Danny Parslow (Cheltenham Town) wins a free kick in the attacking half.
Foul by Enzio Boldewijn (Crawley Town).
Attempt missed. Daniel Wright (Cheltenham Town) left footed shot from the left side of the box is just a bit too high.
Hand ball by Enzio Boldewijn (Crawley Town).
Daniel Wright (Cheltenham Town) hits the left post with a left footed shot from the left side of the box.
Aryan Taj (Crawley Town) is shown the yellow card for a bad foul.
Robert Dickie (Cheltenham Town) wins a free kick on the left wing.
Foul by Aryan Taj (Crawley Town).
Danny Parslow (Cheltenham Town) wins a free kick in the attacking half.
Foul by Adi Yussuf (Crawley Town).
Daniel Wright (Cheltenham Town) is shown the yellow card for a bad foul.
Foul by Daniel Wright (Cheltenham Town).
Lewis Young (Crawley Town) wins a free kick in the attacking half.
Goal!  Cheltenham Town 2, Crawley Town 1. Kaby (Crawley Town) left footed shot from outside the box to the bottom left corner. Assisted by Enzio Boldewijn.
James Dayton (Cheltenham Town) wins a free kick in the attacking half.
Foul by Kaby (Crawley Town).
Joe McNerney (Crawley Town) wins a free kick in the defensive half.
Foul by Daniel Wright (Cheltenham Town).
Foul by Daniel Wright (Cheltenham Town).
Joe McNerney (Crawley Town) wins a free kick in the attacking half.
Substitution, Crawley Town. Adi Yussuf replaces Billy Clifford.
Lewis Young (Crawley Town) is shown the yellow card for a bad foul.
Billy Waters (Cheltenham Town) wins a free kick on the left wing.
Foul by Lewis Young (Crawley Town).

Birthday boy Billy Waters and Jack Munns struck as Cheltenham ended a six-match winless League Two run with a 2-1 win over Crawley.

