Treasurer Joe Hockey has warned multinational companies trying to avoid paying tax by shifting profits from one country to another will be caught in a new net.
The Organisation for Economic Cooperation and Development (OECD) has released a set of proposals for discussion at this weekend's meeting of G20 finance ministers and central bankers in Cairns.
As part of a two-year project due to finish in 2015, the OECD is developing measures to deal with so-called base erosion and profit shifting, or BEPS.
The first phase includes a new international reporting standard, better transparency between tax administrations and restoring the benefits of bilateral tax agreements.
But crucially, multinationals face greater scrutiny in the tax zones in which they operate.
Any multinational that sought to travel from jurisdiction to jurisdiction in order to avoid paying tax would be caught in the proposed new net, Mr Hockey said on Wednesday.
The treasurer will co-host the Cairns meeting with Reserve Bank governor Glenn Stevens.
Shadow assistant treasurer Andrew Leigh hopes the OECD's pioneering report will inspire Mr Hockey to stop talking big and start taking action.
"Joe Hockey will have a much-needed opportunity to show he can deliver more than rhetoric," Dr Leigh said of this weekend's meeting.
Grant Wardell-Johnson, a partner at KPMG's Australian tax centre, said the OECD arguably had completed the easy work.
"The challenge is now whether, and to what extent, countries will adopt into local legislation the recommendations that have been made," he said.
Chartered Accountants Australia and New Zealand agree that building consensus at a global level is an "incredibly ambitious goal".
"(But) there would be no reduction in effort next year when Turkey takes over the G20 presidency," said Michael Croker, who is an Australian representative in an advisory group supporting the OECD project.
Global charity group Oxfam has welcomed the crackdown on tax dodging, but is concerned the reforms will deliver only for rich countries.
More progress was needed in taking into account the interests of poor countries, it said.
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