PARIS (Reuters) - The Organisation for Economic Cooperation (OECD) has proposed overhauling rules for taxing cross-border corporate income to bring them into line with the digital age.

FILE PHOTO: United States one dollar bills are seen on a light table at the Bureau of Engraving and Printing in Washington November 14, 2014. REUTERS/Gary Cameron

Finance ministers from the Group of 20 biggest economies are due to discuss the proposals at their next meeting on the sidelines of the IMF/World Bank meetings on Oct. 17.

Then negotiations will begin among the 134 countries that have backed the principle of new rules with the aim of reaching a deal next year.

That would require a broad consensus, which limits scope for single countries or tax havens to block a deal. While most countries and companies recognize change is inevitable, no-one knows what will happen in negotiations on key details.

Here are the main proposals released on Wednesday which tax experts say could lead to the biggest change in international tax since the 1920s.

WHAT COMPANIES WOULD BE COVERED?

The OECD proposes that the companies that should be targeted by the changes would be those with annual revenues of more than 750 million euros ($824 million).

They would also have a consumer-facing business in a country to be taxed by it, even if they do not have a permanent established business presence there.

Therefore, not only would big digital companies like Facebook FB.O and Google GOOGL.O be covered, but so would consumer goods companies like Apple Inc. AAPL.O and carmakers.

However, most business-to-business companies, like a car parts maker for example, would not be covered. Nor would companies in extractive or commodities industries.

WHAT’S A TAXABLE PRESENCE IN A COUNTRY?

Provided a company falls in the scope, it would have to be determined whether it has a big enough operating presence in a country to be taxable, called a ‘nexus’ in international tax.

The proposal creates a new nexus rule that would say a company is taxable in a market when its sales exceed a certain level in the market, which remains to be negotiated.

For simplicity’s sake, the threshold would be based on a company’s sales and could be adapted based on the size of the country, the OECD says.

HOW MUCH PROFIT CAN A COUNTRY TAX?

If a company is deemed to be taxable in a country, the OECD’s proposal calls for a formula to determine how much of a company’s worldwide profit can be taxed in a given country where it does business.

The formula would apply to the portion of a company’s global group profit reported to financial regulators that is deemed to be above what routine operations earn.

The formula, whose parameters remain to be negotiated, would determine what portion of the remaining profit could be taxed in a country based on the size of the market.

The aim is to bring outsized profits, well above the market average and those of its competitors, within the taxman’s reach.

Countries that consider that they were better off under existing rules would have to be prepared to make their case for exceptional treatment before a binding dispute resolution mechanism.

HOW WOULD INTRA-GROUP TRANSFERS BE TREATED?

The OECD proposals also aim to simplify existing rules for pricing internal transfers from one part of a company to another, which are currently the source of more than half of international tax disputes.

The proposals would maintain rules requiring such internal transfers to be at market prices for routine transactions so companies do not undercharge or overcharge in order to cut their tax bills.

However, the OECD proposes that governments negotiate fixed rates of return that companies would apply in more complex transactions to limit the potential for tax disputes and give firms certainty about how much they owe.

WHAT’S NEXT?

Finance ministers from the Group of 20 biggest economies are to discuss the proposals at their next meeting on the sidelines of the IMF/World Bank meetings on Oct. 17.

If broad support emerges there, the OECD will launch negotiations among the 134 countries that have indicated they are in favor of rewriting the current rules.

The OECD wants to have a blueprint agreement ready in January and a more detailed agreement in June for a final deal by the end of 2020.

At some point in the process, a second track aimed at agreeing a minimum international tax rate is to also join the process.