Nations reach landmark deal on tax rules

Officials from 136 countries and territories have reached a landmark deal to ensure large companies pay their fair share of tax. The agreement sets out a minimum corporate tax rate of 15 percent.

OECD members and other economies reached a final agreement on new global tax rules at an online meeting on Friday. They began full-scale negotiations to review the century-old system in 2013.

The new deal comprises two pillars. One is the introduction of a minimum tax rate of 15 percent, aimed at reducing tax avoidance and curbing the competition to offer the lowest rates.

The other is to facilitate taxation on the cross-border operations of multinationals such as Google, Amazon, Facebook and Apple.

Under the new rules, some of the rights to tax those companies will be reallocated to countries in which they generate revenue.

Low tax countries including Ireland and Hungary joined the agreement, but others such as Kenya, Nigeria, Pakistan and Sri Lanka did not. Japan plans to encourage them to join.