The early high-depth 2014 Busan 0137, the early high-depth 2014 Busan 1470

It is difficult to recognize the fact that a local public official has cultivated a forest directly because he was a local public official.

It is difficult to recognize the fact that he/she has cultivated a forest directly by neglecting the area of an orchard owned by a local public official with a capacity of 50,000 square meters or more, including a transfer farmland. On the ground that the value of a bamboo is part of a land separately stated in a sales contract as a special agreement, the disposition including the transfer value is unlawful.

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

2014Guhap1640 Revocation of Disposition of Imposing capital gains tax

○ ○

○ Head of tax office

2015.21

oly 2015.05

1. The Defendant’s disposition of imposition of capital gains tax of KRW 94,178,130 for the 20x year belonging to the Plaintiff on September 1, 20x.

2. The plaintiff's remaining claims are dismissed.

3. The costs of lawsuit shall be borne by each person;

Cheong-gu Office

The disposition of Paragraph 1 and the defendant on June 1, 20x. 20x. 210,980,000 won for transfer income tax belonging to the 20x year belonging to the plaintiff against the plaintiff shall be revoked.

1. Details of the disposition;

A. The Plaintiff was appointed as a local public official of ○○ City on September 24, 19x. From January 5, 19x to June 23, 19x. The Plaintiff retired on July 30, 20x. After being appointed as the president of the ○ City Facilities Management Corporation, the Plaintiff retired from office in the 20x.

B. On October 13, 19x. 19x. 27,570 square meters of ○○○○-do, ○○○-si, ○○-si, ○○○-si, 156, 27,570 square meters [the above ○○-ri, 156-4 forest and 8,668 square meters and above ○○-ri, 156-6 forest and 557 square meters (hereinafter referred to as “each forest of this case”) were divided into two times through the process of partition, and thereafter, trees (hereinafter referred to as “the instant trees”) were planted in each forest of this case.

C. On June 8, 20x. 20x. ○○○ Co., Ltd. (hereinafter “○○○○”) sold each of the instant forests and fields, and received full payment from ○○ by July 13, 20x.

D. On November 30, 20x. 30, the Plaintiff calculated the transfer value of each forest of this case as KRW 3,606,689,50, the transfer income amount as KRW 3,500,182,651, and the calculated tax amount as KRW 925,219,407, and paid KRW 725,219,40,000, by applying the reduced or exempted tax amount for farmland for over eight years as stipulated in Article 69 of the Restriction of Special Taxation Act and Article 66 of the Enforcement Decree of the Restriction of Special Taxation Act.

E. However, the Defendant confirmed that the Plaintiff cultivated the instant harvested tree by using his family and figures, and the Plaintiff does not seem to have done so directly for at least eight years in each forest of this case on June 1, 2012, issued a correction and notification of KRW 210,980,00 (including additional tax) of the transfer income tax for the year 2012 (hereinafter referred to as the “first disposition”) to the Plaintiff on the ground that “the transaction value on the real estate register of each forest of this case is KRW 3,906,689,50,000 in total, since the Plaintiff was in office as a public official of ○○○ City, the transfer value of each forest of this case was KRW 3,906,689,50, while the Plaintiff transferred each forest of this case and reduces the amount of KRW 300,000,000,0000 in total, on the ground that the Plaintiff arbitrarily calculated and deducted it from the transfer value.”

F. The Plaintiff filed an appeal with the Tax Tribunal on March 7, 20x with respect to each of the dispositions of this case on November 26, 20x. However, the Tax Tribunal rendered a decision to dismiss the Plaintiff’s appeal on May 14, 20x.

[Ground of recognition] Facts without dispute, Gap evidence 1 through 4, 17, 18, Eul evidence 1 through 3 (including branch numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

1) The Plaintiff, while working on the ○○○○ Office, acquired the instant forest land to open the instant forest into an orchard, and planted the seeds of the instant forest land on July 19x. After that, the Plaintiff directly used the hours before the morning and the hours after the morning and the weekends and Sundays after the retirement of the instant forest until the transfer of each of the instant forest land, and transferred from the president of the ○○○ City Facility Management Corporation to the p.m. after the 20x after the retirement of the said forest. As such, the Plaintiff cultivated 1/2 or more of the p.m. farmers with the Plaintiff’s labor for not less than eight years.

2) The Plaintiff: (a) sold the instant forest in KRW 3,606,689,500 to ○○○○, and (b) executed a sales contract in a lump sum of KRW 3,906,689,500 for convenience in selling the instant forest in KRW 300 million; and (c) was merely entered in the real estate registration register of each of the instant forest in the number of actual waterways of a licensed real estate agent.

3) Therefore, each of the instant dispositions taken on a different premise is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Whether it falls under one's own farmland for not less than eight years

1) Article 69(1) of the former Restriction of Special Taxation Act (amended by Act No. 11614, Jan. 1, 2013; hereinafter “Act”) and Article 66(1) and (3) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 24368, Feb. 15, 2013; hereinafter “Enforcement Decree of the Restriction of Special Taxation Act”) stipulate that a resident shall directly cultivate the relevant farmland when he/she lives in a Si/Gun/Gu where the relevant farmland is located for at least eight years, a Si/Gun/Gu where the relevant farmland is located, a Si/Gun/Gu adjacent to the relevant farmland location, or an area within 20km of a straight line from the relevant farmland. In this case, the term “direct cultivation” refers to the cultivation or cultivation of crops or perennial plants on his/her own labor, or the cultivation or cultivation of more than 1/2 of them with his/her own labor. Therefore, whether a resident directly claims reduction of or exemption from capital gains tax (see Supreme Court Decision 20190Da 194.

2) In light of the above legal principles, the following facts can be acknowledged in full view of the health class, Gap evidence Nos. 4 through 14, 17, 19, and 28, the images of evidence Nos. 22 through 26, the witness evidence Nos. 22 through 26, the witness’s partial testimony of Ha○○○, the Administrator of the Rural Development Administration, and the head of the Gyeongnam-do Agricultural Technology Institute.

A) The Plaintiff graduated from ○○ High School, and was appointed as the Local Agriculture and Forestry Working Group on September 24, 19x. On July 30, 20x, the Plaintiff served as a public official in the occupational category of agriculture until he retires on July 30, 20x. The Plaintiff’s personnel record card is written as “agriculture”, and the Plaintiff has technology for the reduction of trees, such as earthing.

B) From January 5, 19x. 19x. 8 years, the Plaintiff worked at the ○○○○ Office (the ○○○ Si was the ○○-gun at the time of ○○○, hereinafter referred to as “○○○-si”). From December 15, 19x. 19x. ○○-ri 345, the Plaintiff’s residence and the ○○-si office were around 1.8km, and each of the instant forests was located near the Plaintiff’s residence.

C) On June 12, 19x. 19x. ○ Agricultural Cooperative was admitted to the Plaintiff’s membership on June 12, 19x. Since December 20, 19x, the Plaintiff was registered as a farmer in the farmland ledger with respect to the Plaintiff, and the Plaintiff owned an orchard of 26,333 square meters of the above ○○○san 156 Forest land (the lot number before being divided into the instant forest land, etc.) and owned it.

D) On April 20, 200x, the head of ○○○ or neighboring residents, etc. prepared a confirmation document stating that the Plaintiff had cultivated a spores directly on the day, night, Saturday, and Sundays before his work. The head of ○○○○○, etc., who operated the agricultural machinery and equipment agency, prepared a confirmation document stating that the Plaintiff purchased a spores, spores, etc. at his agency. On April 4, 200x, the head of ○○○, who resides in the above spores, prepared a confirmation document that the Plaintiff purchased a spores from 19x to 20x, and the head of spores from 19x to 20x. The head of ○○○○ operated by the Plaintiff also prepared a confirmation document that the Plaintiff purchased an agricultural product amounting to KRW 2.5 million each year from 19x to 20x.

E) The Plaintiff, under his own name, traded with ○○ Agricultural Cooperatives from January 1, 20x to 20x. The Plaintiff prepared a confirmation letter that the Plaintiff purchased the whole quantity of a shot house cultivated by the Plaintiff from 19x to 20x. On November 14, 20x 20x, the Plaintiff owned a large number of agricultural machinery under his own name, such as purchase of a track for agriculture, and used tax-free oil.

F) From 2 to 3 years after planting, a small amount of heat begins, and when eight years have elapsed, it would go beyond the quarter of profit and loss. As such, it is somewhat less required to conduct the work of harvest, transportation and storage, sorting, sorting, packing, etc. until eight years have elapsed.

3) However, in light of the following circumstances that can be acknowledged by comprehensively taking account of the aforementioned evidence and the purport of the entire pleadings, it is insufficient to recognize the fact that the Plaintiff was engaged in cultivating the instant trees in each forest of this case on a regular basis or cultivated not less than 1/2 of the farming work with his own labor, and there is no other evidence to prove otherwise. Accordingly, this part of the Plaintiff’s assertion is without merit.

A) Considering that the entire area of the orchard owned by the Plaintiff, including each of the instant forests, was 52,797 square meters, and that the Plaintiff was a public official, the Plaintiff’s cultivation before and after his/her work to commute to and from work or on weekends and Sundays, even if he/she was cultivated by his/her own without his/her family or other person’s learning, it is large to deem that the Plaintiff voluntarily performed at least 1/2

B) 1/2 of the annual agricultural working hours required by the Plaintiff for the entire area of the orchard owned by the Plaintiff is 3,344 hours (=527.97ax 126.7ax x 1/2, and less than a small number of decimal places; hereinafter the same shall apply) as the average of 9 hours per day (=3,44 hours and 365 days). Thus, it is difficult to deem that the Plaintiff was a public official to have engaged in one-half of the agricultural working hours required by the Plaintiff for the entire area of the orchard, without entirely rest or social life, while working as a public official.

C) The Plaintiff asserts that the annual working hours required for the area of the entire orchard owned by the Plaintiff are 1,172 hours a day, 3.2 hours a day, excluding the hours required for harvest, transport, storage, screening, packing, etc. from the above average working hours from around 19x to around 19x year. However, the Plaintiff could cultivate each of the instant forests by using time before and after his/her work, holidays, etc. while being employed as a public official, and that this meets eight years a requirement for capital gains tax reduction for self-employed farmland (2007 to 208). However, according to the Agricultural Utilization Data provided by the Rural Development Administration (2007 to 208), the Plaintiff’s assertion that the annual working hours required for the area of the entire orchard owned by the Plaintiff is not reasonable from the total amount of 1/2 (unit of KRW, KRW, KRW, KRW, KRW, KRW, KRW, KRW, KRW, KRW, KRW, KRW, KRW) to the extent that the Plaintiff’s assertion is not reasonable.

Classification

3 years old;

4 years old;

5 years old;

6 years old

7 years old;

8 years old

Revenue

(,000 won/a)

123

190

475

792

1266

1583

Total Revenue

- 1/2

3,247,015

5,015,715

12,539,287

20,907,612

3,420,501

41,788,825

D) On March 20, 20x. 20, the Plaintiff asked to question " how he worked for a long time as a public official of ○○○, and how he served as the president of the 20x year after his retirement?" "I have been going to work directly on the weekend when he employs his wife and children while employing his wife and children, and you have worked directly on the weekend?" The Plaintiff asked "I have any way to pay daily allowances?" "I have presented a fixed number of employees directly going on the part of the owner of the transferred farmland on the old day (payment to the extent of KRW 200,000,000)", and now (after his retirement in 20x), I have responded to this question, "I have no way to remove the house of the employee of the employer, and have no way to use the house at the present."

E) The farmland ledger is only a document prepared for the management of farmland and the efficient implementation of agricultural policies, and it may be prepared by the Plaintiff’s application and statement without confirmation and investigation as to whether the farmland is self-definite. According to the above farmland ledger, the Plaintiff also states that the Plaintiff is self-definite with a 10,054 square meters of farmland in addition to the self-definite 52,797 square meters of orchard. As seen earlier, given that the Plaintiff was a public official, it is difficult to further trust the entry in the said farmland ledger.

F) The legislative intent of this Act, which provides for capital gains tax reduction or exemption for self-arable farmland, is to prevent speculation on non-owned farmland and to prevent the reduction of rural population by reducing the tax burden so that a person engaged in agriculture directly can engage in agriculture for a long time, and to revitalize agriculture and rural communities. In order to recognize "direct farming", unlike agricultural managers, it is necessary to have direct input of 1/2 or more of the farmers and farmland in the location of the farmland. Accordingly, it is reasonable to interpret that the farmland owner shall be excluded from capital gains tax reduction if he/she cultivates farmland mainly by cultivating farmland using other people's labor while having other occupation than agriculture.

D. Determination on the transfer value of each forest of this case

1) As long as a disposal document is deemed to have been duly formed, the court shall recognize the existence and content of declaration of intent in accordance with the language and text stated in the disposal document, unless there is any clear and acceptable counter-proof as to the content of the document (see, e.g., Supreme Court Decision 2011Da105867, Apr. 26, 2012).

2) According to the following facts, Gap's evidence Nos. 2, 3, 15, 16, 20, and 16, and the witness's testimony and the overall purport of pleading, etc., the total sum of the transfer value of each of the forest of this case and the trees planted on its ground is KRW 3,906,689,50, and among them, the transfer value of each of the forest of this case can be recognized as 3,606,689,50, excluding the 300,000,000,000,000,000 won, and thus, the second disposition of this case based on a different premise is unlawful.

A) The Plaintiff and ○○○○ prepared a sales contract on the premise that the area of each of the instant forests is 9,239 square meters. At that time, the matters stipulated in the special agreement on the sales contract, which was prepared at that time, are stated as follows: “The integrated contract on the site and the ground shall be prepared in this contract, and the site and the ground property (building, trees, etc.) shall be entered in a separate amount.” The following is stated as follows: “The details of the special agreement No. 4, the land price: daily amount of KRW 3,612,00,000, and KRW 300,000,000.”

B) According to the increase in the area of access road site to be excluded from sale, the Plaintiff and ○○○ again drafted a sales contract. At that time, the sales contract was prepared with the same entry as the above special agreement No. 4., and the detailed confirmation column of the broker stated “30 million won out of the total purchase price of KRW 3,906,689,500,” and the seal of the Plaintiff, ○○○ and the broker is affixed separately.

C) On June 2, 20x. 2, 20x. 6.2, the transaction value was reduced by 300 million won compared to the previous one, in the real estate register with the above ○○○○ 347-2 forest and field 8,668 square meters.

D) The Plaintiff asserted that 500 weeks of pine trees in each of the instant forests and fields were confirmed, and that 300 million won was determined, including the price of the tree and the compensation for a satisfy for two years, the Plaintiff stated that the specific grounds for calculating the relevant accounts are as follows: (a) ○○○ General Management Director, ○○○○○○, stated on May 24, 200x, that “the purchase price of each of the instant forest and fields includes KRW 300 million in value of pine trees.”

3) According to the National Tax Service’s capital gains tax enforcement standard 94-0-6, the Defendant asserts that, in calculating the transfer value of land, trees other than bridges, stone fences, various dependent fixtures such as the packaging of roads, crops cultivated and cultivated, and standing trees registered as ownership pursuant to the Act on Standing Timber shall be deemed part of the land. According to the above enforcement standard 96-162-2-2, where forest land and forest trees are transferred en bloc, if forest land and forest trees are transferred collectively, the transfer value of forest trees shall be deemed as part of the land, and if forest trees do not fall under business income, the transfer value of forest trees shall be included in the transfer value of forest land. Thus, the instant disposition 2, including the transfer value, is lawful, since the reduced trees fixed in each forest of this case fall under part of the land.

However, according to Article 94 of the former Income Tax Act (amended by Act No. 12852, Dec. 23, 2014), the scope of transfer income does not include standing trees (a group of trees attached to the land) such as the instant trees, and the execution standard cited by the Defendant is related to forest trees (c) and there is no evidence to deem that the instant forest is subject to this, and therefore, the Defendant’s assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim is justified within the scope of the above recognition, and the remaining claims are dismissed as it is without merit. It is so decided as per Disposition.