The Albanese government has kicked off the multinational tax reforms it promised during the federal election.

Labor pledged to support the OECD’s “two pillar” approach to crack down on multinational tax avoidance, which includes a 15 per cent floor rate for corporate tax globally to help eliminate tax havens.

The OECD reforms also involve a new mechanism allowing multinationals to be taxed in part based on where they sell products and services rather than where they situate their headquarters and intellectual property.

The Labor government has now opened consultation on its tax reform agenda.

“This is all about consulting widely on the proposed OECD multinational tax changes and what they’d mean for Australia,” Treasurer Jim Chalmers said.

Dr Chalmers said the reforms would ensure multinationals paid their fair share of tax and would help fund critical services.

OECD Secretary-General Mathias Cormann, a former West Australian senator, said he was “quietly optimistic” about the global corporate tax reforms.

Speaking at the OECD’s Forum on Tax Administration Plenary in Sydney on Friday, Mr Cormann said the global minimum would become “self-perpetuating” once most countries were signed up.

“As it will not be in any country’s interest to leave money on the table for other jurisdictions to collect at their expense,” he said.

– AAP