Dismissal of the appeal against the supplementary tax assessment for direct federal tax 1999 and 2000

Facts

The appellant [A.X.] was the majority shareholder and chairwoman of the board of directors of the [X.] Construction Company AG. This company had built a development with single-family homes and an apartment building on the order of the majority shareholder [B.X.] . Due to problems with the building ground, renovation work had to be carried out later, the costs of which were borne by the construction company. The tax authorities allocated these costs to the appellant's income as a hidden dividend distribution and issued a supplementary tax assessment. The appellant disputed that the requirements for a supplementary tax procedure were met and that the payments of the company were to be qualified as a monetary benefit.

Considerations

The Federal Court dismissed the appeal. It stated that the costs for the renovation should have been borne by the property owner [B.X.] , who was also the majority shareholder and responsible for the construction company. By not passing on these costs to its majority shareholder, the construction company provided him with a monetary benefit, which was taxable on the recipient's side under Art. 20 DFTA. The appellant's objection that it was a…