The disposition to deny the reduction or exemption of self-employed farmland due to the business income earner during the period of farmland possession and the unknown fact, and to impose the capital gains tax is justifiable.

In light of the fact that a pharmacy is operated and earned income is generated during the period of farmland possession, a joint owner has paid transfer income tax, the fact that a neighboring resident has confirmed by proxy the farmland of this case, and the fact that the claimant's self-defense is unclear, etc., the disposition that imposes transfer income tax is legitimate.

Article 69 Reduction or Exemption of Transfer Income Tax for Self-Cultivating Farmland

2013Guhap4225 Disposition of revocation of imposition of capital gains tax, etc.

AA

○○ Head of tax office

April 1, 2014

June 19, 2014

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s imposition of KRW 00,000,000 and special rural development tax for the year 2012 against the Plaintiff on July 10, 2013 shall be revoked.

1. Details of the disposition;

A. On September 4, 1987, the Plaintiff acquired one-half of the share of ○○○○○○○-dong 000-00 square meters (hereinafter referred to as “instant farmland”). On June 27, 2012, the Plaintiff completed the registration of ownership transfer on the ground that the Plaintiff’s share among the instant farmland was subject to an agreement on the acquisition of public land in the future of ○○○○○-dong 00-00 square meters.

B. Of the instant farmland, the Plaintiff: (a) on September 7, 2012, on the premise that the transfer value of the Plaintiff’s share of KRW 000,00,000 (i.e., the transfer value of KRW 000,000 - the acquisition value of KRW 0,000,000) is subject to the special deduction for long-term holding under Article 95(2) of the former Income Tax Act (amended by Act No. 11486, Oct. 2, 2012; hereinafter the same shall apply); (b) on the premise that the transfer act of the instant farmland share constitutes the subject of the special deduction for long-term holding under Article 69(1) main sentence of the former Restriction of Special Taxation Act (amended by Act No. 11611, Jan. 1, 2013; hereinafter the same shall apply), the Plaintiff made a preliminary return on the transfer income tax of KRW 00,000,000 as income from transfer gains.

C. However, on July 10, 2013, the Defendant, on the ground that “the Plaintiff cannot be deemed to have directly cultivated the instant farmland”, excluded the application of the provisions on capital gains tax reduction and exemption for self-arable farmland under the former Restriction of Special Taxation Act, and issued a notice of correction and notification to the Plaintiff as KRW 00,000,000 (including additional tax of KRW 00,000) for the capital gains tax for the year 2012, and special rural development tax for KRW 00,000 (including additional tax of KRW 00,000) for the special rural development tax (hereinafter “instant disposition”).

D. On August 30, 2013, the Plaintiff filed a request for examination with the head of ○○○○○○ on the said basis, but was dismissed on September 30, 2013.

Facts that there is no dispute with recognition, Gap Nos. 1 and 2 (including a branch number if there is a ground for recognition); below

5) Each entry of evidence Nos. 1, 2, and 3, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

After acquiring the farmland of this case on September 4, 1987, the Plaintiff directly cultivated the farmland of this case with his family members, and purchased agricultural chemicals and fertilizers from time to time for cultivation. Therefore, even if it is unclear whether the Plaintiff has cultivated the farmland of this case from around 2008 to around 201, the disposition of this case which imposed capital gains tax on the Plaintiff is unlawful by excluding the application of this case, even though it constitutes "reasons for capital gains tax reduction or exemption on self-arable farmland under Article 69 (1) of the former Restriction of Special Taxation Act" for a period of not less than eight years from May 23, 191, which was established by the farmland ledger concerning the farmland of this case from around May 23, 191 to June 27, 2012.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) The issues of the case

According to the main sentence of Article 69(1) of the former Restriction of Special Taxation Act, the tax amount equivalent to 100/100 of capital gains tax on income accrued from the transfer of land prescribed by Presidential Decree, among the land cultivated by a resident prescribed by Presidential Decree who resides in the seat of farmland for at least eight years by means prescribed by Presidential Decree, shall be reduced or exempted. However, according to Article 66(13) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 24141, Oct. 15, 2012; hereinafter the same), the term "direct cultivation of a leisure machine" means that a resident is engaged in cultivating crops or growing perennial plants on his/her own farmland at all times or by cultivating or cultivating them with his/her own labor.

Ultimately, in order for the Plaintiff to be subjected to the reduction and exemption of capital gains tax on self-arable farmland, the Plaintiff should be deemed to have been engaged in the cultivation of crops in the instant farmland or cultivated at least 1/2 of farming works with his own labor, and the burden of proof for this is that the Plaintiff, i.e., a person liable for duty to pay capital gains tax on self-arable farmland (see, e., Supreme Court Decision 2002Du7074, Nov. 22, 2002).

2) Specific determination

The following circumstances, which can be recognized by comprehensively taking account of the aforementioned evidence, Gap evidence, Gap evidence, Eul evidence Nos. 3 through 6, Eul evidence No. 4 and Eul evidence No. 5, testimony and the purport of Eul evidence No. 2 and the whole arguments, i.e., ① the provision on reduction and exemption of capital gains tax on self-arable farmland should be strictly interpreted to grant the benefits of reduction and exemption of capital gains tax to those who are actually engaged in farming. In order to recognize "direct farming," the law must cultivate at least 1/2 of the farming work as it is, and the cultivation by employing other persons under his responsibility and accounting shall not be deemed to fall under such cases. ② The plaintiff has operated his pharmacy before acquiring the farmland of this case. ② Even if the plaintiff stated that he had no past experience in farming before acquiring the farmland of this case. ③ Even if the plaintiff prepared farmland of this case in the farmland ledger, the plaintiff stated that only formally prepared the farmland ledger for the purpose of tax reduction and exemption, and that the plaintiff stated the farmland of this case as farmland of this case for 1 year in the farmland ledger of this case.

According to the above statements by neighboring residents, the farmland of this case appears to have been cultivated by another person at the time when the plaintiff purchased the farmland of this case. Moreover, there is doubt as to whether the farmland of this case purchased as above is for the cultivation of the farmland of this case (the farmland ledger with respect to the plaintiff includes farmland other than the farmland of this case) and whether the farmland of this case purchased as above is for the cultivation of the farmland of this case. 6 although the plaintiff prepared and submitted a written confirmation of the fact of cultivation to confirm the direct cultivation of the plaintiff in the name of BB and CCC, it is difficult to believe that the land of this case had cultivated the farmland of this case for the period during which it appears impossible for the plaintiff to directly verify whether the farmland of this case was cultivated by the plaintiff because it did not reside near the farmland of this case, and since the above confirmation letter does not meet the plaintiff's assertion, it is difficult to view that there is a lack of evidence to acknowledge that the plaintiff had been cultivated for more than 5 and 6 evidence Nos. 20 and witnessB's testimony of the farmland of this case of this case of this case of this case of this case of 17.

Therefore, the disposition of this case where the Plaintiff imposed capital gains tax and special rural development tax (including additional tax) by excluding the application of the provisions on capital gains tax reduction and exemption on self-Cultivating farmland under Article 69(1) of the former Restriction of Special Taxation Act on the transfer of Plaintiff’s shares among the farmland of this

The argument is without merit.

3. Conclusion

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