The world’s leading finance ministers agreed on Friday to change the rules on taxing profits, and warned multinational companies they could no longer use their size and international presence to dodge taxes.

Under the rules, companies such as Starbucks, Amazon and Google will find it harder to concentrate their profits in low-tax countries and tax havens, a shift that promises to raise up to $250 billion a year in extra tax revenues, says the OECD .

Angel Gurría, head of the OECD, the club of mostly rich nations that has drawn up the rules, said it was time “to recover the trust of our citizens” and “move to the next phase which consists of a well-defined trilogy: implementation, implementation, implementation”.

The plans to crack down on corporate tax avoidance were devised by more than 60 governments in the first overhaul of the rules for taxing profits for nearly a century.

Criticism

But campaigners have criticised the rules for merely patching up the existing system, although businesses say they have a greater degree of consensus than initially expected.

The new rules, called "base erosion and profit shifting" or Beps, are designed to improve transparency, close loopholes and restrict the use of tax havens. They are the culmination of an international project launched two years ago by G20 governments in response to public anger over corporate tax avoidance.

Finance ministers from the largest economies hailed the initiative, which they hope will raise revenue and force companies to pay the tax they owe. Lou Jiwei, China's finance minister, said each country needed to "enhance domestic reforms" to implement the rules.

When the finance ministers were asked whether they would resign if they had not implemented the rules domestically within a year, none raised a hand, but all insisted they had their own ways to make companies pay their tax under the OECD initiative.

Jack Lew, US Treasury secretary, said: "From a US perspective, there are elements of this that don't require legislation and we're looking to getting to work right away."

Implementation

Even though many governments have moved to tackle tax avoidance by multinationals, there have been doubts about how uniformly the measures will be implemented. In particular, the Beps project will not change US law, although the US Treasury intends to introduce rules, requiring companies to say where they make their profits and pay taxes.

Governments only agreed to apply minimum standards to some aspects of the new rule book, such as measures to stop the abuse of tax treaties. They will not be obliged to implement other recommendations, such as curbs on the tax deductibility of interest payments for which governments have agreed a “general tax policy direction”.

– Copyright The Financial Times Limited 2015