The discreet message from the Organisation for Economic Co-operation and Development (OECD) in its report on the reform of international business tax rules is clear: Ireland needs to move sooner rather than later to end abusive tax avoidance by some major multinational companies that have exploited the domestic tax code.

The OECD proposals – largely accepted in principle by 44 countries that account for nine tenths of the world's economy – represent a compelling case for change. As the organisation's secretary-general, Angel Gurria, said major reform of international tax law is both overdue, and also needed to restore public trust in the equity of the tax system. The aftermath of the financial crisis has seen individual taxpayers pay ever higher personal tax pay bills, just as some major corporations pay less than their fair share of corporate tax.

States, for many decades, have operated double taxation agreements to ensure the same income is not taxable in two states. But over time globalisation has made it easier for big corporations to exploit tax loopholes in those double taxation agreements, and to locate profits in low tax centres where they conduct little real business.

In recent years major multinational companies have used aggressive tax practices to minimise their tax bill and to maximise their profits. Last year Ireland found itself at the centre of an international corporate tax controversy, when Apple and Google were castigated for their tax avoidance measures, amid claims that Ireland was a tax haven. In 2012 Apple had paid just 2 per cent tax on its foreign earnings.

The OECD measures have yet to be outlined fully, and are designed to tackle base erosion and profit shifting – the relocation of company profits to low or no tax jurisdictions where the company has no active presence. This deprives countries where the company has generated those profits of their share of tax. The Government’s approach has been to accept the need to rewrite the international tax rules for global business, and to work closely with the OECD in advancing its reform agenda.

The OECD's informal advice to the Government is that it should act unilaterally to amend some of the most flagrant abuses of the tax code by multinational companies, notably the "double Irish" tax avoidance mechanism, whereby companies can relocate profits to a tax haven, Bermuda.

The pace and timing of changes to the Irish corporate tax are a matter for the Government to decide, but given the reputational damage that Ireland has already suffered for accommodating aggressive tax practices, and the likelihood that abusive tax avoidance measures will, most likely, be closed down, early action is worth considering. After all, sweeping reforms that eliminated all aggressive tax practices, would leave a more level playing field – one in which Ireland’s low corporate tax rate would still ensure it retained a competitive advantage in attracting foreign direct investment.