The pact at a meeting of G-7 finance ministers in London smooths transatlantic tensions that have for years undermined negotiations to update century-old rules for the 21st century economy. It paves the way for a broader accord by the Group of 20 as early as next month.

“That global minimum tax would end the race-to-the-bottom in corporate taxation, and ensure fairness for the middle class and working people in the U.S. and around the world,” U.S. Treasury Secretary Janet Yellen said in a statement after the talks in London on Saturday.

The U.K. Treasury said on Twitter that the deal:

• Will hit the largest global firms with profit margins of at least 10%
• The G-7 also agreed to the principle of a global minimum corporation tax on large firms of at least 15%
• The measures will help crack down on tax avoidance

The aim is to stop multinational firms shifting profits to lower their tax bills, make them pay more in countries where they operate, and adapt the system to cope with trade in intangibles like data and information.

It is “a historic agreement to reform the global tax system, to make it fit for the global digital age and crucially to make sure that it is fair, so that the right companies, pay the right tax in the right places,” U.K. Chancellor of the Exchequer Rishi Sunak said after hosting two days of the G-7 talks.

The envoys will seek to gain the support of G-20 nations, staring with a meeting next month in Venice

“For the first time in several years, G-7 members are able to define rules for the international system of the 21st century,” French Finance Minister Bruno Le Maire said. “We’ve been fighting for four years in all European and international forums, here at the G-7 and the G-20 for a fair taxation of digital giants and for a minimum corporate tax.”

While many technical details still need to be decided in the coming weeks, the G-7 on Friday signaled a breakthrough on the question of how to share the spoils of taxing tech companies.

That’s always proved tricky since the U.S. refused any ring-fencing of digital firms in the new rulebook. Yet Europeans, under political pressure from voters to make tech companies pay more, have always wanted to explicitly target digital in any new initiative.

The issue is one of two pillars in a discussion that has lasted years at the Organization for Economic Cooperation and Development. The other aimed to set a global minimum tax so that countries can levy the profits their companies record in low-tax jurisdictions.

During Donald Trump’s presidency, the transatlantic division on digital issues spiraled into a battle of unilateral measures and threats of trade sanctions, which although suspended, are still in place.

The antipathy was greatest between Paris and Washington, since France was the first country to bypass the slow-going OECD process on how to tax profits, opting for a controversial levy on exclusively on the digital revenues of large firms operating.

As the U.S. and Europe exchanged threats over the last two years, negotiators at the OECD struggled with tortuous technical solutions that would be politically palatable to both sides.

The arrival of Joe Biden in the White House changed the situation dramatically. His administration swept away the complex system for defining which type of business would fall in scope of new rules and replaced it with a simplified approach.

The G-7 accord suggests the U.S. and Europe have found a way to square the circle so that all tech firms are included, without having to define them as such. But there were no details on exactly where to set thresholds, which will need to be resolved in talks at the OECD that next convene at the end of June.

Venice marks another opportunity for progress. While it may deliver a broad political agreement, some countries will need to first pass national legislation. The OECD has said a final deal may not come until October.