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Singapore's Finance Minister Lawrence Wong speaking at the G20 meeting. (Photo: Facebook/Lawrence Wong) - 

G20 finance ministers on Saturday (Jul 10) gave their backing to a historic deal to overhaul the way multinational companies are taxed, and urged hold-out countries to get on board.

A total of 132 countries have already signed up to a framework for international tax reform, including a minimum corporate rate of 15 per cent, struck earlier this month.

But the endorsement by the 19 biggest economies plus the European Union will help ensure it becomes a reality following years of negotiations.

"We have achieved a historic agreement on a more stable and fairer international tax architecture," the ministers said in a final statement following two days of talks in Venice, hosted by G20 president Italy.

"We endorse the key components of the two pillars on the reallocation of profits of multinational enterprises and an effective global minimum tax."

Singapore was among the countries that supported the deal.

Finance Minister Lawrence Wong, who was among those attending the grouping's first face-to-face meeting since February 2020, said it was the "most significant changes in tax rules in over a century".

Mr Wong said he spoke at the G20 discussion about the need to recognise substantive economic activities and to allow big and small economies to compete on an equal footing.

"Tax systems, besides raising revenue, should continue to encourage innovation, growth and jobs," he wrote in a Facebook post early on Sunday.

"There is still some work to be done, and several design parameters to be worked out. Singapore, like many others, looks forward to finalising these design elements by the next G20 meeting in October."

US Treasury Secretary Janet Yellen said the momentum must not now be lost.

"The world is ready to end the global race to the bottom on corporate taxation," she said in a statement, adding that it "should now move quickly to finalise the deal".

French Finance Minister Bruno Le Maire said it was a once-in-a-century opportunity for a "tax revolution", adding: "There is no turning back."

His German counterpart, Olaf Scholz, tweeted: "Finally, large corporations can no longer escape their tax liability."

The reforms aim to prevent countries competing to offer the lowest tax rates to attract investment, which has often resulted in multinationals paying derisory levels of tax.

Final agreement is expected in the run-up to the G20 leaders' summit in Rome in October, with hopes the reforms can be in place by 2023//CNA