Some 130 nations have endorsed a global minimum tax as part of a global effort to prevent multinational corporations from evading taxes by transferring earnings to low-tax jurisdictions.

The Organization for Economic Cooperation and Development accord released on Thursday additionally provides for taxing the world's largest corporations in countries of the world wherein they generate revenues through internet enterprises and have no physical presence. The deal came in response to US President Joe Biden's request for at least a 15% rate that pushed the proceedings closer to achieving a target for a settlement by the middle of the current year. The Group of 20 nations will therefore review the accord in meetings later this year, to finalize the specifics in October and executing the pact in 2023.

Nations might tax their firms' overseas revenues if they go untaxed through subsidiaries in other countries under the agreement. Because earnings would be taxed at home anyhow, there would be no incentive to employ accounting and legal methods to transfer profits to low-tax nations.

The agreement was not signed by all 139 nations that took part in the negotiations. The plan to tax nations where firms have sales but no physical presence exempted extractive companies like oil and mining, and regulated banks.

The agreement now faces additional technical work to fill in specifics and assessment by the Group of 20, which constitutes about 80% of the world economy. More debate is planned at the G-20 finance ministers' conference in Venice next week, accompanied by the full G-20 summit of national leaders in October. The idea to tax firms with income however no physical presence would necessitate governments signing up to an international treaty.

In the United States, Biden has suggested a minimum tax of 21% on large US corporations' foreign revenues to discourage them from transferring money to tax havens. Biden's US tax should first be approved by Congress, where the Democratic president has a slim majority.

President Joe Biden applauded the agreement achieved at the OECD on Thursday by 130 nations on a new worldwide minimum tax, which Washington had been pressing for.

Biden stated that the agreement, which establishes a tax floor of at least 15%, should build the global economy more equal for workers, which he has made a priority of his administration.

“With such a global minimum tax in place, multinational companies will no longer be able to set nations against each other to drive down tax rates and safeguard profits at the cost of public revenue,” Biden said in a statement.

The objective is to discourage corporations from relocating their headquarters to low-tax jurisdictions to conceal their revenues, therefore robbing governments of essentially required resources.

“They would no longer be allowed to avoid paying their fair share by concealing earnings earned in the United States or any other nation in lower-tax jurisdictions,” Biden added.

US Treasury Secretary Janet Yellen hailed the agreement as "historic" and said it is "a clear indication: the race to the bottom is one step closer to ending."

“We also have the opportunity to design a global and domestic tax structure that allows American workers and companies to start competing and find success in the global economy,” Yellen said.

Ireland refused to sign a declaration endorsed by 130 of the 139 nations negotiating a worldwide reform of corporations' cross-border taxation at the Paris-based OECD on Thursday, a source with information of the discussion told Reuters.

The office of Irish Finance Minister Paschal Donohoe, who is negotiating on Ireland's behalf at the Organisation for Economic Cooperation and Development in Paris, did not answer anything.

Donohoe's office stated in a statement that he had been scheduled to attend a news conference on the subject at 1800 GMT.

French Finance Minister Bruno Le Maire said on Thursday that the worldwide agreement pushed by the OECD to enforce a minimum tax rate of 15% on multinational corporations has been the most significant international tax agreement established in a century.

“The OECD just announced that it had achieved an agreement with 130 nations on a new worldwide taxation system. It is a tremendous step forward. “This is the most significant international tax agreement negotiated in a century,” Le Maire said at a press conference.

German Finance Minister Olaf Scholz said on Thursday that a worldwide corporate minimum tax deal reached by 130 nations was the most significant advance in global taxes in years.

“The race to the bottom in competition is now over,” Scholz told reporters immediately after the deal was achieved in negotiations organized by the Organization for Economic Cooperation and Development.

He added that while specifics remained to be worked out, the deal represented “colossal progress” and would allow governments to expand infrastructure investment and measures to address climate change.

Scholz stated that the 130 nations represented 90 % of global GDP and showed massive efforts by Germany and other nations to safeguard fair taxes of large technology firms such as Amazon.