Nearly 130 countries and territories have agreed to a roadmap aimed at overhauling international tax rules which have been overtaken by development of digital commerce.
The OECD said it will put the outline work programme - the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) - to finance ministers of the Group of 20 economic powers next week to build support for the technical and sensitive talks.
Companies like Google, Facebook and Amazon have strained existing rules and created tensions because they are able to cut tax bills by booking profits in low-tax countries no matter where the end customer is.
"There is now an international consensus recognising that our tax rules are no longer adapted to the 21st century," French Finance Minister Bruno Le Maire, a strong supporter of the overhaul, said in a statement.
A growing number of countries, including France, Britain and Italy, are creating new taxes on digital companies that sell into their markets from low-tax countries, while Washington has threatened retaliation.
It believes US groups are unfairly targeted while companies say the multiplication of national taxes makes it harder for them to do business.
After agreeing to the principle of rewriting cross-border tax rules earlier this year, the OECD said 129 countries and territories had endorsed a 40-page work programme laying out options to revamp countries' rights to tax foreign companies and set a global minimum corporate tax rate.
The aim is now to narrow down the options on the table in order to have the outline for a global deal by the end of the year or January 2020 so that the remaining details can be hammered out for a final agreement late next year.
The roadmap agreed on Tuesday and released today sets out two tracks with the first focused how to divide up rights to tax a company where the good or service is sold even if it does not have a physical presence in the country.
If companies are still able to find a way to book profits in low tax or offshore havens, countries could then apply a global minimum tax rate to be agreed under the second track.
According to OECD estimates, revenue losses from BEPS amounted to $240 billion in 2015, equivalent to 10% of global corporate tax revenues.
"Important progress has been made through the adoption of this new Programme of Work, but there is still a tremendous amount of work to do as we seek to reach, by the end of 2020, a unified long-term solution to the tax challenges posed by digitalisation of the economy," the OECD's Secretary-General Angel Gurría said.
"Today's broad agreement on the technical roadmap must be followed by strong political support toward a solution that maintains, reinforces and improves the international tax system. The health of all our economies depends on it," he added.
Business group Ibec said that the OECD/G20 BEPS proposals, if implemented, would represent the most fundamental change in global corporate tax policy in a century.
Ibec also noted that some of the proposals, in particular proposals for a minimum effective global corporate tax rate, could pose significant challenges for the country's FDI model over the coming decade.
Ibec's chief economist Gerard Brady said the proposals marked a significant step in a process which may result in real change in the Irish business model.
He said there is now clear renewed political momentum behind global multilateral tax reform through the OECD/G20 BEPS process.
"The Government will need to react proactively by significantly strengthening other areas of our FDI regime. This will require significant investments in areas such as education, innovation, and quality of life which we have failed to make over recent years," he added.