No vGA due to the mere possibility of using a Spanish property

December 12, 2024

The plaintiff lived in this property with his family for several years, but then moved out with the family and tried to sell the property. The tax court considered the mere possibility of using the property to be a hidden profit distribution. Not so the BFH.

In the opinion of the BFH, the plaintiff credibly argued that the property was not actually used and that stays on site only served to prepare the sale of the property.

In its judgement of 01.10.2024 (VIII R 4/21), the BFH ruled that the mere actual possibility of a shareholder of a corporation to also use a business asset of the corporation (here: residential property) for private purposes (here: for residential purposes) does not in itself lead to a hidden profit distribution (vGA) for the shareholder. There is no general principle based on experience that a shareholder of an owner-corporation who visits a property located in A for the purpose of selling the property also uses this property privately because he could actually access it at any time.