Big tech firms and luxury brands will be forced to pay their way in major economies like the UK under a proposed global tax shake-up. 

The Organisation for Economic Co-operation and Development - essentially a club of developed states - has outlined a scheme to squeeze more money out of companies like Amazon, Google, Apple and Netfix. 

Such enterprises are currently able to shift profits around the world, making sure they report they are making the most money in the jurisdiction with the lowest taxes.

The OECD, after what The Financial Times said was months of careful negotiations, wants firms to pay the most tax where they make the highest sales. Its proposals will help big nations like the US, China, Italy, Germany, France and Britain which often lose out to low-tax or offshore jurisdictions.

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Ángel Gurría, the OECD secretary general, said: “This plan brings together common elements of existing competing proposals, involving over 130 countries, with input from governments, business, civil society, academia and the general public. It brings us closer to our ultimate goal: ensuring all multinational enterprises pay their fair share.”

He added:. “Failure to reach agreement by 2020 would greatly increase the risk that countries will act unilaterally, with negative consequences on an already fragile global economy. We must not allow that to happen."

The proposals amount to a reform of a century-old international tax regime which many countries is no longer fit for purpose in a globalised economy.

The OECD countries are losing nearly £200 billion in missing tax that coiuld be paying for vital public services, including those on which large tax efficient companies rely, such as roads and law enforcement.