Tax havens are also part of the deal
The push for a uniform corporate tax policy across the world has received a boost as 130 countries and jurisdictions agreed to the proposals.
The Organisation for Economic Co-operation and Development said that once the deal is ratified, major companies, including Google and Amazon, would pay taxes of at least 15%.
The new tax policy will bring $150bn in tax revenues to governments around the world.
Recent progrès in talks saw all countries within the G20 group, including Brazil, China, India and Russia, come to an agreement at the G7 in London in June.
A handful of nations, including Ireland and Estonia, are yet to sign up to the tax reforms.
“The framework updates key elements of the century-old international tax system, which is no longer fit for purpose in a globalised and digitalised 21st-century economy,” the OECD said.
President Joe Biden said the deal brings the world towards an agreed upon policy that will “halt the race to the bottom for corporate taxes”.
A number of countries and jurisdictions known as tax havens are also part of the deal.
The jist of the agreement is that major companies would be required to pay a minimum of 15% tax in every country they operate in.
Mathias Cormann, Secretary General of the OECD, added that “after years of intense work and negotiations, this historic package will ensure that large multinational companies pay their fair share of tax everywhere.”
Chancellor Rishi Sunak is pushing for exemption for the City of London in the G7’s move for a new global tax system targeted at the world’s largest multinational enterprises.
Sunak previously stated that the recent agreement was “historic” however it would force the biggest tech companies to “pay their fair share of tax in the UK”.
However, the Financial Times reported that Britain is one of a number of countries seeking “an exemption on financial services”, as the chancellor is fearful that multinational banks headquartered in London could be impacted.