Ireland could see its share of corporation tax revenue from large multinationals fall if new proposals published by the OECD this morning are adopted.
Under the plans, firms - including large digital companies with a significant presence in this country - would have to pay tax wherever they have significant consumer-facing activities and generate their profits.
The OECD proposals are being put out to consultation.
Currently many multinational firms, particularly in the digital space, move their profits and intellectual property assets around the world to lower tax jurisdictions in order to reduce their tax bills.
This has led to criticism from countries where digital firms have large numbers of customers, but pay little or no tax.
However, under the plans published today, some profits and taxation rights would be re-allocated to countries where multinational firms operate, even if they do not have a physical presence there.
This would be achieved by the setting of new rules about where tax should be paid, and what proportion of the profits should be taxed.
"Failure to reach agreement by 2020 would greatly increase the risk that countries will act unilaterally, with negative consequences on an already fragile global economy," said OECD Secretary-General Angel Gurría in a statement.
"We must not allow that to happen," he added.
"The current system is under stress and will not survive if we don't remove the tensions," the OECD's head of tax policy Pascal Saint-Amans said.
Among the expected winners from the reforms, if they proceed as laid out, would be the US, Germany, France and the UK.
The new proposals come after months of international negotiations aimed at achieving a consensus over international corporation tax rule reform.
Current rules date back to the 1920s and are considered no longer fit for purpose in a digital and globalised world.
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They bring together common elements of three different proposals from 134 countries who are members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS).
The process aims to ensure large and highly profitable businesses can no longer reduce their tax bills by shifting profits made in one jurisdiction to another with a lower tax rate.
A second pillar of negotiations is looking at other BEPS issues, including ensuring there is a minimum corporate income tax on multinational profits.
Minister for Finance, Paschal Donohoe, said all countries including Ireland now need to play a constructive role in responding back to the OECD paper.
He said there was a long road ahead and it would likely be late 2020 or early 2021 before a final agreement was achieved.
Mr Donohoe added that it is an issue that Ireland has a big stake in.
Meanwhile, the American Chamber of Commerce in Ireland welcomed the OECD proposals.
"We agree with the view that Pillar I proposals should be globally acceptable and provide certainty for users," it said in a statement.
"The American Chamber continues to argue that the issue of taxing the digital economy should be dealt with through OECD level proposals as part of the BEPS plan as opposed to unilateral tax regimes."
"The Chamber also believes that measures should be appropriately targeted to cause as little disruption as possible to the long established international corporate tax framework."
But Christian Aid said the proposals do not go far enough.
"The OECD has made the significant leap to view companies as one global entity, however, their proposed changes have fallen short in coming up with an equitable way of redistributing a company's profits," said Sorley McCaughey, Christian Aid Head of Advocacy and Policy.
"Proposals to allocate only a tiny fraction of residual profits based on formulary apportionment means that the dysfunctional arms-length principle is still guiding the allocation of the vast bulk of a company’s profits."
"While the proposed changes will potentially effect Ireland negatively in terms of the amount of corporation tax it will collect, it will likely be of very limited value for developing countries who would benefit more from a focus on numbers of employees rather than size of used market."