The proposed move would make it a bit tough for US multinationals to ship jobs overseas and will give incentives to those who bring operations back into the US.
The Treasury Department said that the US business tax system does too little to encourage job creation and investment in the US and creates too many opportunities that encourage shifting production and profits overseas.
In a statement, Obama said the current corporate tax system is outdated, unfair, and inefficient.
"It provides tax breaks for moving jobs and profits overseas and hits companies that choose to stay in America with one of the highest tax rates in the world.
It is unnecessarily complicated and forces America's small businesses to spend countless hours and dollars filing their taxes," he said adding that this needs to change.
He said the tax system should not give companies an incentive to locate production overseas or engage in accounting games to shift profits abroad, eroding the US tax base.
"Introducing the principle of a minimum tax on foreign earnings would help address these problems and discourage a global race to the bottom in tax rates," it said.
The Treasury on Wednesday released the President's framework for reforming the US business tax system, which would enhance American competitiveness by simplifying the tax code and eliminating dozens of tax loopholes and subsidies, incentivising job creation and investment here at home and lowering the business rate while broadening the tax base.