The meaning of "direct farming" as a requirement for reduction or exemption of capital gains tax and the responsibility of proof;

The meaning of "direct farming" as a requirement for reduction or exemption of capital gains tax should be determined by the interpretation of Article 66 (13) of the amended Enforcement Decree of the Restriction of Special Taxation Act in accordance with the language and language so as to determine whether "not less than 1/2 of the farming work" has been cultivated directly with his own labor, and the burden of proof for such direct farming is against the taxpayer

Article 69 of the Restriction of Special Taxation Act (Abatement or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

Enforcement Decree of the Restriction of Special Taxation Act Article 66 (Reduction or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

2012Gudan23825 Revocation of Disposition of Imposing capital gains tax, etc.

In addition, the person taking charge of the action of the DongAA

1.B 2.CC 3.DD

a) the Director of the Tax Office

June 21, 2013

August 23, 2013

1. The plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

Cheong-gu Office

The Defendant’s imposition of capital gains tax of KRW 000 and KRW 0000 of local income tax, each of the capital gains tax against the deceased AA and Plaintiff BB on November 10, 2011, shall be revoked.

1. Details of the disposition;

"A. On November 5, 2002, the deceased AA and the plaintiff BB acquired OO-dong O-dong 243 m2,013m2 (hereinafter "the land before the division of this case") on October 17, 2005, 956m2 among the above land was divided into O-dong O-dong 243-1 (hereinafter "the land in this case"), and on November 16, 201, the land in this case was transferred to EE and completed the registration of ownership transfer on November 16, 201; (b) the AA and the plaintiff BB were applied to the defendant on February 1, 201 on the grounds that "the tax base for the transfer of the land in this case was scheduled, while making a preliminary return on the transfer of the land in this case, and that it constitutes "the entire amount of the transfer income tax under this case" under Article 69 (1) of the former Restriction of Special Taxation Act.

C. However, on November 10, 201, the Defendant: (a) operated a restaurant in other areas while possessing the instant land; (b) leased the instant land to a third party for a certain period; (c) excluded the application of Article 69(1) of the Restriction of Special Taxation Act; and (d) corrected and notified each transfer income tax of KRW 000 to AA and Plaintiff BB.

D. AA and Plaintiff BB were dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on February 7, 2012, but were dismissed on June 28, 2012.

E. AA died on December 27, 2012, which was after the filing of the instant lawsuit, and its heir had Plaintiff BB and children, Plaintiff CCC and DD.

Facts without dispute over the basis of recognition, Gap 1, 2, and 3 evidence 1, 2, and Eul 2 through 5, respectively, and the purport of the whole pleadings

2. The plaintiffs' assertion

From 195 to 100, Plaintiff BB directly cultivated Plaintiff BB with AA for a period of eight years or more from the date of acquiring the instant land before the instant subdivision to the date of transfer of the instant land, and thus, it is deemed that the Defendant’s disposition based on a different premise is unlawful, even though it is subject to reduction or exemption of capital gains tax.

3. Whether the disposition is lawful;

A. Article 69 (1) of the former Restriction of Special Taxation Act provides that "The tax amount equivalent to 100/100 of the transfer income tax shall be reduced or exempted for the income accruing from the transfer of the land prescribed by the Presidential Decree among the land which is subject to agricultural income tax, and Article 66 (13) of the Enforcement Decree of the Restriction of Special Taxation Act provides that "direct cultivation" means that a resident engages in the cultivation of agricultural products or the growing of perennial plants in his own farmland, or growing or growing with his own labor not less than 1/2 of the cultivation of the crops or the growing of perennial plants." On the other hand, Article 2 subparagraph 5 of the Farmland Act provides that "self cultivation" means that a farmer is constantly engaged in the cultivation of agricultural products or the growing of perennial plants in his own farmland, or a person who cultivates or cultivates not less than 1/2 of the farming works with his own labor."

As above, Article 69(1) of the former Restriction of Special Taxation Act declares the land directly cultivated for not less than eight years as the object of exemption from transfer income tax, and delegates the specific scope to Presidential Decree, and Article 66(13) of the Enforcement Decree of the Restriction of Special Taxation Act, which stipulates the meaning of "direct cultivation" as the object of unification with the self-regulation provision under Article 2(5) of the Farmland Act.

Therefore, the meaning of "direct farming" as a requirement for reduction or exemption of capital gains tax should be determined by the interpretation of Article 66 (13) of the amended Enforcement Decree of the Restriction of Special Taxation Act, and whether 1/2 or more of "one-half or more of the farming work" has been cultivated by using one's own labor (see Supreme Court Decision 2010Du8423, Sept. 30, 2010). The burden of proof for such direct farming lies on a tax obligor claiming for capital gains tax (see Supreme Court Decision 90Nu639, May 22, 190).

B. On the other hand, in light of the following facts: (a) the 2-year Agricultural Cooperative Building No. 1 and the 2-year Agricultural Village No. 1 and the 20-year Agricultural Village No. 1 and the 2-year Agricultural Village No. 1 and the 2-year Agricultural Village No. 1 and the 30-year Agricultural Village No. 1 and the 13-No. 14 were no longer known to the 5-year Agricultural Village No. 2; (b) the 1-year Agricultural Cooperative No. 2 were no longer known to the 0-year Agricultural Cooperative No. 1 and the 2-year Agricultural Cooperative No. 30 were no longer known to the 5-year Agricultural Cooperative No. 1 and the 2-year Agricultural Cooperative No. 4 were no longer known to the 0-year Agricultural Cooperative No. 1 and the 20-year Agricultural Cooperative No. 30 were no longer known to the 5-year Agricultural Cooperative Co. 27, 2004.

4. Conclusion

Therefore, the plaintiffs' claims are dismissed for lack of reason.