Ireland says it will phase out a well-worn loophole that allows multinationals to avoid paying billions of dollars in tax.
The avoidance scheme known as "the double Irish" is exploited by corporate giants including Google, Apple, Facebook, Linkedin and PayPal.
The move by Ireland comes as G20 leaders who'll meet in Brisbane next month face renewed pressure to rein in corporate tax dodgers with consistent global reform.
The announcement by Ireland's Finance Minister Michael Noonan comes as Ireland begins to recover from the global financial crisis which saw it bailed out by the European Union and the International Monetary Fund.
"I want to make sure that the slur of the "Double Irish" is no longer attached to Ireland's reputation. it had become something that was thrown at us internationally" Mr Noonan said.
"There's a big advantage I believe for Ireland to be the first mover. Our competitor countries, if you were investing there tomorrow you would still be uncertain about what the regime might be in two years time."
Ireland slashed its corporate tax rate in the late 1990s to 12.5 percent to attract investment by global companies.
But the "double Irish" allows corporations to use complex structure where untaxed revenues are funnelled to a subsidiary company in a tax haven like the Cayman Islands or Bermuda.
The loophole means multinationals end up paying very little tax or no tax at all.
Throughout the year, G20 finance ministers have been ramping up pressure to end corporate tax dodging so that more revenue can go into government treasury coffers.
However, a G20 committment to reform global tax rules is reliant on individual members such as Ireland to tighten up laws locally.
Ireland is a participant the G20 as a member of the European Union, so the decision by Ireland's Finance Minister Michael Noonan to end "the double Irish" is significant.
As part of the phased-in reforms, multinationals currently using the "double Irish" will be able to keep exploiting it until 2020 when the loophole will be closed.
New participants will be blocked from minimising or avoiding tax.
However, analysts expect tax lawyers for the corporate giants using the "double Irish" will be working on a response and most likely new ways to minimise their tax.
The move to rein in multinationals poses a big risk for Ireland's soft economy as it recovers from the financial crisis.
Around 160,000 workers are paid by the hundreds of foreign firms incorporated in Ireland and any threat to relocate to another tax haven is an ever-present threat.