President Joe Biden and Treasury Secretary Janet Yellen announced Thursday that some 130 countries have agreed to a new 15% global minimum tax rate for corporations.

Yellen called it a “historic day for economic diplomacy” in a statement, adding that Biden “has spoken about a ‘foreign policy for the middle class,’ and today’s agreement is what that looks like in practice.”

While the agreement was signed by finance ministers from all of the Group of 20 nations and some 130 in total, representing more than 90% of global GDP, it still needs to make it through the legislative bodies of each country — meaning it’s far from a done deal.

Still, the news represents one of the biggest potential reforms in international tax policy in decades. Here is what to know about a global minimum tax rate and how it is expected to impact U.S. businesses and workers.

What is a global minimum tax rate?

A global minimum tax rate is the minimum amount large, international corporations have to pay. The aim is to prevent companies from dodging tax payments by relocating operations or headquarters to another nation with lower rates.