In two separate referendum votes, Swiss electors tightened corporate tax breaks at the cantonal level, and tightened regulations on types of firearm.

Swiss voters approved a government plan to remove some tax breaks for multinational companies, putting the Alpine state in line with international standards but also maintaining its status as a low-tax centre, reports said.

A report by the Wall Street Journal on the corporate tax referendum said the measure passed by a margin of 66 per cent to 34 per cent on Sunday. The new law is called Federal Act on Tax Reform and AVS Financing (TRAF).

The European Union and other international bodies have tried to make Switzerland – which isn’t in the EU – eliminate special deals operated in Swiss cantons. Switzerland has access to the EU's Single Market, but such a status comes with a price in terms of how low a state can set tax rates. (In the past, the EU has also criticised the Republic of Ireland for its ultra-low corporate tax regime.)

On the other hand, the referendum plan adds global accepted incentives, such as measures to encourage research, and income from patents, the report said.

The report noted that a large share of Swiss corporate taxes are set at the cantonal level. With the reform enacted, the canton of Zug near Zurich, which is home to many crypto-currency and blockchain startups, remains the most competitive canton. (Source: UBS.) Basel also operates competitive taxes, and is home to Novartis and Roche. When cantonal and federal corporate taxes are combined, Switzerland has an overall average rate of 21.15 per cent, according to the Organization for Economic Cooperation and Development, compared with 26 per cent in the US and 30 per cent in Germany.

International law firm Baker McKenzie said the new rules enter law on 1 January 2020. “Cantons are generally required to adapt their tax legislation to the new rules introduced by [the new law] by the same date. While in some cantons, the respective cantonal amendments have already passed the legislative process, the legislative process for other cantons is still ongoing,” it said.

"TRAF provides the cantons with a certain flexibility in terms of how they may introduce the new measures into cantonal law. This will allow them to tailor their tax systems to local needs and strategies. Most cantons have already announced a decrease of their ordinary corporate tax rates as an accompanying measure to the new rules," the firm added in a note about the referendum result.

Anne Liebgott, founder and chief executive of Switzerland-based wealth management firm Americans Welcome ? Switzerland, a firm handling financial affairs of US expats, said the country should not be concerned by the changes. "Switzerland will not lose out in the global competition for businesses. Highly qualified and dedicated employees, excellent and reliable infrastructure, long-term political and economic stability and an attractive taxing system puts Switzerland at the top of many companies' wish lists when establishing an overseas enterprise," she said. 

Firearms

In a separate referendum, Swiss electors also backed calls to tighten controls on automatic and other types of firearms, a measure designed to put the country on a similar footing with its European neighbours. Switzerland is a member of the passport-free Schengen Area, so the measure was designed to improve security and control over weapons. Switzerland famously has liberal laws on arms and it operates compulsory military service. Reports said that more than 63 per cent of Swiss of voters agreed on controls. The result came two years after killings in other European countries such as France, Belgium and Germany. The referendum is controversial because the Swiss have a long tradition of private firearms ownership. Veterans serving in the Swiss military are allowed to keep weapons at home after tours of duty.

Ownership of semi-automatic weapons will now require regular training on the use of firearms and a serial numbering of major parts of some guns to help track them. 

As part of the Swiss system of direct democracy, voters in 2011 threw out a left-wing proposal, including a central database on firearms, a strict licensing system for gun owners as well as a ban on stocking army-issue firearms in private households. Around 56 per cent of voters rejected the initiative (source: Swissinfo).