Covid law in Switzerland faces vote of national preference

Image copyright Getty Images Image caption Covidien moved its headquarters from Dublin to Switzerland

Switzerland has launched a referendum on whether to keep restrictions on private companies that moved headquarters abroad.

Its centre-right government has argued that the country needs to keep its competitive tax rules.

French campaigners, in the fight to ban tax avoidance, want a reversal of the so-called Covid law.

Covid was an unfair competitive advantage in tax affairs created after the 2008 financial crisis by Switzerland’s tax authorities.

It was meant to prevent companies competing with foreign rivals by moving their headquarters abroad.

Backers of the referendum question say the move was also designed to help pharmaceutical and medical equipment makers such as Zurich-based Swiss manufacturer Novartis, which became much bigger in Europe after moving its headquarters from Switzerland to Jersey.

Those restrictions are due to end in 2019.

French campaigners for the referendum, which was approved by Switzerland’s cabinet on Tuesday, said a repeal would be a signal to companies that Switzerland was open for business again.

Swiss politicians argue that they face stiff competition from other European countries such as Britain which has relatively low company taxes.

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