Facts
The appellant, the Cantonal Tax Office of Zurich, conducted a tax assessment for cantonal and municipal taxes as well as direct federal tax 2007 against [X.] , the respondent. [X.] received a payment of CHF 620,684 in 2007 from a Liechtenstein family foundation established by [Y.] , [X.] 's father. The foundation aimed to cover the costs of education and training as well as provide financial support to the beneficiaries.
The Cantonal Tax Office of Zurich assessed [X.] with a taxable income that included the payment from the foundation in full. [X.] lodged an objection and argued that the payment should be treated as a lifetime annuity and therefore be taxable only at 40%. The lower court, the Administrative Court of the Canton of Zurich, ruled in favor of [X.] and reduced the taxable income accordingly.
Against this decision, the Cantonal Tax Office of Zurich filed a complaint with the Federal Court, arguing that the payment from the foundation should not be treated as a lifetime annuity but rather as income from movable assets, which is fully taxable.
Considerations
The Federal Court examined the jurisdiction and admissibility of the complaint and concluded that the complaint was admissible. The court then explained that the direct federal tax as an income tax for natural persons includes all recurring and one-time income, except for capital gains from the sale of private assets and the cases exhaustively listed in Art. 24.
The court then discussed the question of whether the payment from the Liechtenstein family foundation should be treated as a lifetime annuity. It concluded that the payment did not meet the requirements for a lifetime annuity, as the amount…