Large-scale corporate tax reform has won support from 136 countries, bridging major differences over the world's lowest corporate tax rate and without introducing a new digital tax that the US calls discrimination.
The Organisation for Economic Co-operation and Development (OECD) announced on Friday that the Group of 20, the European Union and all OECD member states have joined the agreement. Friday's agreement includes a minimum corporate tax rate of 15 per cent, as well as key parameters on how to divide the profits of multinationals into more countries to pay taxes.
The OECD, which hosts the tax reform negotiations, said the minimum interest rate could eventually increase government revenue by $150 billion a year, and the new rules would also redistribute $125 billion in profits to countries that generate income from large companies but may have few entities to pay taxes.
In addition, as of Friday, countries had agreed not to impose a new digital services tax.
Friday's agreement builds on a preliminary agreement in July, when countries first agreed on key points of the plan, including which companies would be subject to profit redistribution rules.
Tax reform negotiations over the past few years have focused on two major issues: how to distribute taxable profits and the establishment of the world's lowest corporate tax rate.