It's time for a complete overhaul of the global tax system to ensure each company pays their fair share, says Nobel laureate Joseph Stiglitz.

A group of leading economists -- led by Stiglitz -- issued a call Tuesday for countries to overhaul the system to prevent multinationals such as Apple (AAPL) and Google (GOOGL) taking advantage of loopholes to cut their tax bills.

"Multinational corporations act and therefore should be taxed as single and unified firms. It is time for our [political] leaders to be bold," Stiglitz said.

Many large companies are known to shift their profits and revenue between subsidiaries to benefit from lower taxes in certain nations, such as Ireland and Luxembourg, he said.

Related: Amazon caves, agreeing to pay more tax in Europe

Stiglitz said that creating a new worldwide tax system is realistic, but all nations would have to work together to agree rules and close loopholes.

The group of economists said in a statement that it was critical to "curb tax competition to prevent a race to the bottom."

Developed nations should take the first step by agreeing on a minimum rate of corporate tax, possibly under the auspices of the Organisation for Economic Cooperation and Development.

"We won't allow [companies] to simply shop around and avoid all taxes," said Stiglitz. "This is an idea whose time has come."

Among the key proposals, Stiglitz and his colleagues say that companies should pay tax based on national sales.

For example, Apple makes over 35% of its revenue in the United States, and so it should pay tax on this revenue to the U.S.

Companies should also be required to apportion income from intellectual property to the country where it was developed, rather than to a low tax location.

The economists also suggest establishing an intergovernmental tax body within the United Nations that would combat abusive tax practices.