Rishi Sunak has announced that some of the world's wealthiest countries have reached an agreement on taxing multi-national companies.
Members of the G7 met in London to formulate the plan, which seeks to tackle corporate tax avoidance by some of the world's most high-profile tech companies.
Sunak said G7 finance ministers have committed to a global minimum corporate tax rate of at least 15 per cent. Companies such as Google and Amazon could be amongst those to be affected by it.
Governments from across the world have long struggled to reach an agreement on how to raise more money from companies which operate across many different countries but seek to declare profits in areas where they pay little in the way of tax.
The Chancellor of the Exchequer outlined the significance of the new agreement, describing it as "historic".
"After years of discussion, G7 finance ministers have reached a historic agreement to reform the global tax system to make it fit for the global digital age," Sunak said, adding that it "meant the right companies pay the right tax in the right places".
The agreement between the G7 - which comprises of the US, UK, France, Germany, Canada, Italy and Japan - will put pressure on other countries to follow them when the proposal is put before the G20 next month.
