By Richard Rubin 

WASHINGTON -- An international plan to reshape corporate taxation for the digital age is expected to draw support from finance ministers of the largest economies as the proposal's authors begin working through messier details.

The Group of 20 finance ministers and central bankers will consider the plan Friday. They are expected to urge it forward, aiming for political consensus by June 2020 and then changes to individual countries' laws and treaties.

"The goal is to move as fast as possible -- if we have political agreement," said Pascal Saint-Amans, the senior tax official at the Organization for Economic Cooperation and Development, who is running the process.

Countries are debating new global rules to coordinate corporate taxes, in response to concerns that technology companies avoid taxes in jurisdictions where they have customers but report little profit. Without an agreement, countries will continue creating unilateral taxes, such as France's new levy on digital companies, which applies a 3% tax on revenue.

Even as G-20 finance ministers gathered in Washington, Italy's government this week confirmed that it will impose a 3% tax on revenues of companies providing digital services, a levy known as the "web tax" that will hit large U.S. companies. Spain, the U.K., Austria, Australia and Chile have announced similar actions.

The U.S. has threatened retaliation against the French tax, though both countries have committed to seeking an international consensus.

"That urgency is felt across countries. I think the business community also feels that urgency," said Barbara Angus, global tax policy leader at EY LLP and a former tax staff member at the Treasury Department and House Ways and Means Committee. "There will be tension between the real need to spend time on the technical details and the need to move forward."

Countries are working through the OECD, an association of developed countries that released a framework earlier in October and is taking public comment until Nov. 12. The U.S. has been involved but Treasury Department officials haven't commented publicly on the framework.

"We are at still-beginning stages of a very kind of broad and significant project, with a lot of different people involved, a lot of different countries and governments," said Jennifer McCloskey, vice president of policy at the Information Technology Industry Council, a trade group whose members include Oracle Corp. and Amazon.com Inc.

Under the OECD approach, governments would agree on a standard profit rate for a company's global operations. Then, individual governments could tax profits above that, based on total sales accounted for by each country.

The proposal would reach beyond pure tech companies, after U.S. officials warned that such an approach would disadvantage the country that is home to the biggest tech giants. The plan would be limited to companies with global revenue over EUR750 million ($830 million) that are consumer-facing, a term that requires definition. And countries need to agree on formulas for determining profits and on dispute-resolution mechanisms.

One thing to watch is how specific the agreement gets, said Lilian Faulhaber, a Georgetown University law professor.

"Countries can think they all mean the same thing and then later realize they don't mean the same thing," she said. "They're trying to find out where there's actual substantive disagreement and where there are technical areas that need to be worked on."

Broadly, the international effort responds to changes in how business is done. Corporate profits are now taxed where value is created, often where a company has its headquarters or in a low-tax jurisdiction where it houses intellectual property.

That hurts high-tax countries such as France without homegrown tech giants but whose residents are customers of companies such as Facebook Inc., Alphabet Inc. and Apple Inc.

Under the OECD plan, countries such as France and Italy could gain revenue, while Ireland and Switzerland could lose as taxes shift from low-tax jurisdictions to large consumer markets. The U.S. fiscal impact is fuzzier because it could lose revenue from tech companies but gain from taxes on foreign firms serving the U.S. market.

The OECD is helping countries analyze the proposals and gauge the potential effect on their tax revenue.

The process will require consensus among more than 130 jurisdictions, which may prove difficult. Potential opponents include smaller Nordic countries with corporate headquarters and what Mr. Saint-Amans called "investment hubs" that have attracted businesses with low tax rates or favorable rules.

"You have losers, and the investment hubs are not winners and some may be significantly impacted," he said.

In the U.S., Congress might need to adjust laws and ratify treaties to reflect international consensus. That likely won't happen until 2021 or later, and American political uncertainty could affect other countries' view of any deal.

"We don't know who will be in power then," Ms. Faulhaber said. "We don't know whether there will be an appetite for more tax reform."

Paul Hannon contributed to this article.

Write to Richard Rubin at richard.rubin@wsj.com

(END) Dow Jones Newswires

October 18, 2019 08:04 ET (12:04 GMT)

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