Article 51 of the Enforcement Decree of Income Tax Act

2. The costs of lawsuit shall be borne by the Plaintiff.

A. On March 17, 2004, the Plaintiff acquired a total of 00,000 square meters of 0,000 square meters of O-ri 00,000 O-ri 0,000 square meters of 00,000 square meters of 331 square meters of ri-ri,00,000 adjacent to the above forest on August 18, 2006, 165 square meters of 00-0,000 square meters of ri-ri,000,000,000 square meters of 0,000,000 (hereinafter referred to as “the instant forest”).

B. In April 2003, Yangsan-si planted 1,500 glue trees in the forest of this case (hereinafter “the forest of this case”) as part of the National Treasury subsidy project, and carried out a grassing project in the forest of this case by not later than April 2006.

C. On June 23, 2008, the Plaintiff transferred the forest land of this case to EE and ECC (hereinafter “instant transfer proceeds”).

D. On August 29, 2008, the Plaintiff filed a scheduled return of tax base for capital gains tax on the transfer margin of the instant forest, stating that “In the event that the transfer of the instant forest is transferred along with the forest land, the acquisition value or transfer value of the forest land and the forest land cannot be separated, and thus, the Plaintiff shall file a separate return on the transfer income tax on the transfer margin of the forest land and the business income generated from forestry, as it constitutes a case where the acquisition value or transfer value of the forest land and the forest land cannot be separated from the forest land,” pursuant to Article 51(8) of the Enforcement Decree of the Income Tax Act, the transfer value of the instant forest falling under the forest land shall be calculated as the standard market value at KRW 00,000,000,000 as the transfer income tax, and the Plaintiff filed a report and paid KRW 00,000,000 as the global income tax on May 31, 209, by deducting the above standard market value from the total transfer value of the instant forest.

E. The Defendant determined the transfer of the instant forest land on the ground that the transfer of the instant forest land cannot be deemed business income, and paid 60% tax rate under Article 104(1)2-7 of the Income Tax Act (hereinafter “instant disposition”) to the Plaintiff on June 1, 2010 after deducting the tax base calculated by calculating the amount of income based on the actual transaction price pursuant to Article 96(1) of the former Income Tax Act (amended by Act No. 9897, Dec. 31, 2009; hereinafter the same shall apply) and paying 00,000,000 (including additional tax) for the transfer income tax for the year 2008 (hereinafter “instant disposition”).

F. On September 6, 2010, the Plaintiff dissatisfied with the instant disposition and filed an appeal with the Board of Audit and Inspection on September 6, 201, but was dismissed on July 21, 201.

[Ground of Recognition] Facts without dispute, Gap evidence 1-1 to 5, Gap evidence 2, 3, 4, Gap evidence 5-1, 2, Gap evidence 6, Gap evidence 7, 8, Eul evidence 1 and 2, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) After acquiring the instant forest, the Plaintiff had been engaged in growing activities, such as the value enhancement of the instant forest trees planted in the said forest by directly or indirectly employing or hireing the instant forest, and this constitutes a “hyeing business” among the industrial activities defined in the Korea Standard Industrial Classification, and thus becomes subject to business income under the Income Tax Act. The Plaintiff transferred the instant forest trees en bloc, which is separate from the instant forest land, but did not separate the transfer value of forest land and forest trees, and did not divide the transfer value of forest land and forest trees, and did not make the instant transfer proceeds. Therefore, the Defendant should be taxed as a separate business income for the instant forest portion among the transfer proceeds. However, the Defendant erred by applying Article 96(1) of the former Income Tax Act by deeming the entire transfer proceeds of the instant forest land as the transfer price of forest land in this case

(2) The instant disposition imposes capital gains tax on the forest trees that cannot be subject to capital gains tax under the current income tax system that imposes capital gains tax only on specific assets such as real estate and is in itself unlawful.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Determination on the first argument

(1) Comprehensiveally considering the purport of arguments as to Gap 2, 3, 4, 8, 11, and Eul 3's evidence Nos. 3, Eul 4-4, 2, and Eul 5's evidence Nos. 1, 5, Yangsan City listed the forest of this case as part of the state subsidy project from April 11, 2003 to April 18, 2003, and used 0,000 won for the forest of this case at its expense. ② From 2003 to 2006, the forest land of this case was conducted through the forestry association, etc. with the total amount of 0,00,000 won and the amount of 20,000,000 won and 30,000,000,000 won and 0,000,000 won and 0,00,00,000 won and 20,00,00 forest land category and 3,00.

(B) The following circumstances revealed in light of the above facts, i.e., ① insofar as the forest trees of this case do not have the method of public announcement, such as the registration of standing trees or the name thereof, it shall not be treated as independent from the land in principle, and the management of the forest trees of this case shall be deemed to have been achieved as part of the land as general trees. ② While the Plaintiff’s management of the forest trees of this case was mainly conducted by Yangsan City, the amount or activities disbursed for afforestation, etc. of this case did not have any specific afforestation activities before transferring the forest land of this case, ③ the business income refers to the income generated from a specific business, and the term “business income” refers to the income earned from the activities continuously and repeatedly conducted under its own calculation and responsibility, and the distance between the Plaintiff’s residential area and the forest of this case, or the Plaintiff’s age, career, etc., the value of the forest land of this case to be purchased continuously and repeatedly from the Plaintiff’s sale and purchase as the total forest land of this case is difficult to be deemed to have been acquired as the forest land of this case.

(2) Judgment on the second argument

As seen earlier, insofar as the subject matter of the sales contract concluded between EE and thisCC with respect to the instant forest is the forest of this case and the forest trees of this case planted above are not subject to separate sales, the Defendant’s disposition of this case ultimately does not impose capital gains tax on the forest trees for which transfer income tax is imposed on the forest land. Accordingly, this part of the Plaintiff’s assertion is without merit.

(3) Sub-decisions

Therefore, the instant disposition based on the premise that the entire transfer proceeds of this case is income generated from the transfer of forest land of this case is lawful.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.