Facts
Based on a divorce settlement, A. paid his ex-wife a lump-sum of CHF 93,000 to settle a lifelong, irrevocable maintenance allowance of CHF 380 per month according to Art. 151 of the Swiss Civil Code (ZGB). A. claimed this amount as a deduction in the assessment year 1994, which the tax administration, however, did not allow in the final assessment of the direct federal tax 1995/96. The Tax Appeal Commission of the Canton of Basel-Landschaft allowed a reduced amount of CHF 78,000 as a deduction, whereupon the Federal Tax Administration filed an administrative court appeal.
Considerations
The Federal Supreme Court states that according to Art. 33 para. 1 lit. c of the Federal Act on Direct Federal Tax (DBG), spousal maintenance payments to the divorced spouse can generally be deducted from the taxable income. The term "maintenance payment" comes from civil law (Art. 151 and 152 ZGB) and includes both periodic annuity payments and lump-sum payments.
However, the Federal Act on Direct Federal Tax does not expressly state whether lump-sum payments also fall under the term "maintenance payment". The Federal Supreme Court therefore interprets the term in consideration of the tax law context. It denies the deductibility of lump-sum payments, as these are to be qualified as non-deductible…