One hundred thirty countries have agreed to endorse the United States' idea for a global minimum tax on companies.

On Thursday, Treasury Secretary Janet Yellen revealed that 130 nations had agreed upon a group of worldwide minimum taxes on enterprises as part of a more significant accord to alter international tax regulations.

If broadly adopted, the GMT would essentially stop the practice of multinational firms relocating their headquarters to low-tax countries like Ireland and the British Virgin Islands, even though their customers, operations, and executives are situated elsewhere.

"For decades, the United States has engaged in a self-defeating international tax race, cutting its corporate tax rates only to see other countries cut theirs in response." As a result, there was a global competition to see who could decrease their lowest and fastest corporation rate. "No nation has won this race," Yellen said in a statement on the agreement.

The agreement allegedly includes a framework for eliminating digital services taxes aimed at the most prominent American tech firms.

In their place, policymakers agreed to a new tax structure based on where multinational corporations do business rather than location.

The Organization for Economic Cooperation and Development, which presented a blueprint last November describing a two-pillar approach to international taxes, has already prepared much of the framework for implementing a GMT.

Negotiations with 137 member nations and jurisdictions resulted in the OECD Inclusive Framework on Base Erosion and Profit Shifting, or BEPS.

The particular rate at which the GMT was not mentioned in Yellen's remarks, although the Biden administration has advocated for at least 15%.

LATER THIS MONTH, the G-20 finance ministers and central bankers will meet in Venice, Italy, and the global tax plan will be high on the agenda.

The plan developed in part by Biden's national security advisor Jake Sullivan stresses how may blend foreign and domestic policies into a new middle ground between conventional conservative and liberal approaches to global affairs.

"Foreign policy for the middle class" seeks to guarantee that globalization, commerce, human rights, and military strength are all used to help working Americans, not just billionaires and multinational businesses, and not just for abstract ideological reasons.