The G7 group of advanced economies has reached a "historic" deal to make multinational companies pay more tax.
Finance ministers from the group agreed the plan on Saturday as part of talks held in London, the chancellor, Rishi Sunak, said.
The idea of the agreement is that multinationals will have to pay a minimum tax rate of at least 15% in each country they operate.
Tech giants Amazon and Facebook are among those likely to be affected.
The deal announced on Saturday, between the US, the UK, France, Germany, Canada, Italy and Japan, plus the EU, could see billions of dollars flow to governments to pay off debts incurred during the Covid crisis.
US president Joe Biden initially proposed a minimum rate of 21%, but was persuaded to reduce this to 15% to make it acceptable to a wider group of countries.
UK Chancellor of the Exchequer Rishi Sunak, who hosted the summit, said the agreement would make the global tax system "fit for the global digital age".
His German counterpart, Olaf Scholz, said it was "very good news for tax justice and solidarity and bad news for tax havens".
"Companies will no longer be in a position to dodge their tax obligations by booking their profits in lowest-tax countries," he said.
Within hours of the deal, it was praised by Nick Clegg, Facebook’s vice president for global affairs, who called it “a significant first step towards certainty for businesses and strengthening public confidence in the global tax system”.
“We want the international tax reform process to succeed and recognise this could mean Facebook paying more tax, and in different places,” he said. G7 leaders hope the agreement will be endorsed by the G20 group of nations, which includes China, Russia, South Africa and Saudi Arabia, later in the year.
Labour shadow chancellor Rachel Reeves said Britain must fight harder for the 21% proposal. “It’s encouraging to see these first moves towards a global pact on tax avoidance. But this government has spent the last few weeks watering down what was intended to be an ambitious 21% rate.
“That would have brought £131m extra a week to Britain for our NHS and other public services, while also stopping our high streets being aggressively undercut.”
Her criticism was echoed by the IPPR thinktank, which said that while a 15% rate could raise £7.9bn for the UK, a 21% rate could raise £14.7bn and the move would not be enough to end the race to the bottom on tax.
The agreement will be discussed in detail at a meeting of G20 finance ministers in July in Venice.
Paolo Gentiloni, the EU commissioner for the economy, described Saturday's agreement as a "big step... towards an unprecedented global agreement on tax reform" and promised the EU would "contribute actively to making that happen" in Venice.