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

Cheong-gu Office

The Defendant’s disposition of imposition of capital gains tax of KRW 90,234,960 against the Plaintiff on December 10, 2012 is revoked.

A. On April 16, 2012, the Plaintiff transferred KRW 760,000,000 and paid KRW 161,611,490,00,000, calculated by deducting the amount of special long-term holding deduction on June 20, 2012, KRW 269-1,623 square meters (hereinafter “instant land”); KRW 269-2 large-scale large-scale large-scale large-scale large-scale 11 square meters; and KRW 161,61,490,00,000 calculated by deducting the amount of special long-term holding deduction on June 20, 2012.

B. On December 10, 2012, the Defendant issued a correction and notification of KRW 90,234,960 to the Plaintiff on the ground that the instant land was not subject to the special long-term holding deduction for non-business land (hereinafter “instant disposition”).

C. The Plaintiff underwent the pre-trial procedure.

[Ground of recognition] Unsatisfy, Gap 1, 2, and Eul 1.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

(1) On April 23, 1985, the Plaintiff acquired the instant land and received the special long-term holding deduction at the time of transfer.

Although there was no difficulty in doing so, Article 95(2) of the Income Tax Act was amended by Act No. 7837 on December 31, 2005, and Article 95(2) of the Income Tax Act excluded the special long-term holding deduction on the land for non-business under Article 104(3) of the Income Tax Act, so the special long-term holding deduction on the transfer of the land in this case was not applied. Accordingly, the amended provisions of the Act are invalid as being deprived of the property right by retroactive legislation, and the disposition in this case is unlawful.

(2) Since the Plaintiff owned farmland before the enforcement of the above amendment provisions, and in this case, it is not necessary to continuously apply the special deduction for long-term holding, there is a justifiable reason to deduct the special deduction for long-term holding and report and pay transfer income tax. Therefore, the part on imposition of additional tax among the disposition in this case is unlawful.

B. Relevant statutes

Attached Form is as shown in the attached Form.

C. Determination

(1) Articles 95(2) and 104 of the Income Tax Act amended by Act No. 7837 of Dec. 31, 2005

3. It is not applicable retroactively to the land that was already transferred before its enforcement and for which the taxation requirements have been completed, but is applied to the land that was transferred after its enforcement (see Supreme Court Decision 2010Du17281, Oct. 25, 2012). This applies to this case, and is also applicable to Articles 95(2) and 104-3 of the Income Tax Act, amended by Act No. 11146, Jan. 1, 2012. Therefore, this part of the Plaintiff’s assertion is without merit.

(2) On the sole basis of the aforementioned reasons, the Plaintiff cannot be deemed to have justifiable grounds for arbitrarily making a special long-term holding deduction and not paying a portion of transfer income tax when reporting and paying the transfer income tax following the transfer of the instant land. Therefore, the Plaintiff’s assertion on this part is without merit.

(3) The instant disposition is lawful.

3. Conclusion

The claim of this case is dismissed as it is without merit.