The world’s most powerful nations Friday agreed to a sweeping overhaul of international tax rules, with officials backing a 15% global minimum tax and other changes aimed at cracking down on tax havens that have drained countries of much-needed revenue.

The Organization for Economic Cooperation and Development, which has been leading the negotiations, said the new minimum tax rate would apply to companies with annual revenue of more than 750 million euros ($866 million) and would generate around $150 billion in additional global tax revenue per year.

“Today’s agreement will make our international tax arrangements fairer and work better,” OECD Secretary-General Mathias Cormann said in a statement. “We must now work swiftly and diligently to ensure the effective implementation of this major reform.”

EXPLAINER: How global deal stems corporate use of tax havens

The agreement is the culmination of years of fraught negotiations that were revived this year after President Joe Biden took office and renewed the United States’ commitment to multilateralism. Finance ministers have been racing to finalize the agreement, which they hope will reverse a decadeslong race to the bottom of corporate tax rates that have encouraged companies to shift profits to low-tax jurisdictions, depriving nations of money they need to build new infrastructure and combat global health crises.

On Friday, Hungary joined two other important holdouts, Ireland and Estonia, in agreeing to the plan. Kenya, Nigeria, Pakistan and Sri Lanka did not sign on to the agreement.

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The United States, which proposed the 15% minimum corporate tax rate, has long looked for ways to minimize incentives for companies to shift profits abroad to lower their tax bills. As the Biden administration prepares to try to raise corporate rates in the United States, getting a global minimum tax in place has become critical to prevent companies from simply moving their headquarters overseas.

The deal goes beyond setting a global rate — it also creates new rules for the digital era. Under the agreement, technology giants like Amazon, Facebook and other big global businesses will be required to pay taxes in countries where their goods or services are sold, even if they have no physical presence there.

The separate tax aimed at the technology giants will reallocate more than $125 billion of profits from the home countries of the 100 most profitable firms in the world to the markets where they operate.

Critical details still remain to be worked out. The OECD statement did not offer a clear timeline for when the existing “digital services taxes” that countries have in place would be rolled back and how the new taxes on large, profitable companies would be divided among countries.

Politics could also complicate the administration’s goals. To comply with the new global minimum tax requirements, Congress will have to pass legislation raising the tax that American companies pay on foreign profits to 15%, or higher, from 10.5%.

Democrats expect they can pass a global tax increase along party lines using a legislative procedure called budget reconciliation. Republicans disagree, and on Friday, several Republican senators warned that the administration’s negotiations appeared to “undermine the Senate’s constitutional authority, as well as the United States’ role as a reliable trading partner.”

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The accord would represent a sea change in the way the world’s largest corporations have been taxed for decades, and is likely to make them pay more taxes while spreading revenue more evenly to countries where those businesses earn sales. Until now, profits have largely been taxed where businesses have had a physical presence. European governments have been pushing for years to even out a global tax system that low tax countries such as Ireland had depended on to lure businesses looking to reduce the taxes they pay.

“As of this morning, virtually the entire global economy has decided to end the race to the bottom on corporate taxation,” Treasury Secretary Janet Yellen said in a statement.

French Finance Minister Bruno Le Maire called the agreement “historical,” saying in an interview that “we shouldn’t underestimate the political and financial consequences.”

“For the first time, we’d be in a situation at the world level to avoid tax optimization and tax avoidance,” he said, “and to have a fair amount of taxes paid by digital giants from the United States, China or European Union countries.”

The agreement is expected to be finalized next week in Washington by finance ministers of the Group of 20 largest economies, and national leaders are likely to sign off when they meet for a summit in Rome at the end of October. Countries have set a goal of fully activating the agreement by 2023, because it will take time for countries to change their tax laws and for international tax treaties to be updated.

European governments are watching anxiously to see whether Biden can get the legislation passed to ensure that the United States is in compliance.

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The sputtering talks gained momentum in May when the United States agreed to accept a minimum tax of at least 15%, which was lower than the 21% it was hoping to secure.

At international forums during the summer, negotiators grappled over potential carve-outs, an implementation period and how the agreement would be enforced once enacted.

Among the biggest questions were how the European Union would cajole holdout countries such as Ireland, Estonia and Hungary, whose economic models have been built around low tax rates, to sign on. Without unanimity in the EU, the agreement could not be enacted.

The devastating global economic impact from the coronavirus pandemic was an impetus to get a deal done now, Le Maire said. Governments see the new tax revenue that they will be able to collect as a vital resource to reduce an inequality divide that worsened during the crisis.

“The level of inequality around the world was totally unacceptable, and the best way of reducing the inequalities in a very short lapse of time was to use the taxation tool,” he said.