Cho High Court Decision 201J 2058 ( October 27, 2011)

It is necessary to reside at the seat of the previous farmland at the time of the transfer, and only if it is self-fluence.

Even if the person resides in the seat of the transferred farmland for not less than three years in total from the time of the acquisition to the time of the transfer, there is no evidence to acknowledge that the transferred farmland was directly cultivated at the time of the transfer, and it does not meet the requirements of residence and cultivation to be exempted from the farmland to the time of the transfer.

Article 70 of the Restriction of Special Taxation Act

2011-gu 2635 Revocation of Disposition of Imposing capital gains tax by rectification.

Maximum XX

Head of the High Tax Office

April 2, 2012

May 7, 2012

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of capital gains tax of KRW 000 for the year 2006 against the Plaintiff on March 2, 2011 shall be revoked.

1. Details of the disposition;

A. On December 21, 2006, the Plaintiff transferred 00 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20,000 m2478 m20 m2478 m2. On the other hand, on December 20, 2006, the Plaintiff acquired O-dong 000 m2479 m2479 m20 m2479 m20 m20 m200 m20 m20 m206.

B. The Plaintiff applied Article 70 of the Restriction of Special Taxation Act (amended by Act No. 921, Jan. 1, 2010; hereinafter “the Restriction of Special Taxation Act”) on the ground that he acquired the instant substitute farmland and transferred the farmland of this case, and upon which the Defendant conducted the on-site investigation from May 3, 2010 to May 22, 201, the Plaintiff terminated the investigation as a reporter by recognizing that the Plaintiff’s application for reduction of capital gains tax was appropriate.

C. The Inspector General of the Central Regional Tax Office pointed out that the Plaintiff did not meet the requirements for reduction or exemption of capital gains tax according to farmland substitute land due to the Plaintiff’s failure to reside in the seat of the farmland transferred in this case at the time of regular audit of the Defendant. Accordingly, the Defendant denied the Plaintiff’s application for reduction or exemption of capital gains tax, and issued a disposition of imposition of KRW 000 of capital gains tax belonging to the Plaintiff in March 2, 201 (hereinafter “instant

D. On May 31, 201, the Plaintiff dissatisfied with the instant disposition, filed an appeal with the Tax Tribunal on May 31, 201, but the Tax Tribunal dismissed the said appeal on July 27, 2011.

[Ground of recognition] Facts without dispute, each entry in Gap evidence 1 to 4 (including provisional number), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In the meantime, since the Plaintiff resided in the location of the transferred farmland of this case or in an area adjacent thereto for not less than three years together from the time of the acquisition to the time of the transfer, the Plaintiff’s farmland of this case is subject to reduction of capital gains tax due to farmland substitute land. In addition, even if the Plaintiff did not reside in the location of the transferred farmland of this case at the time of the transfer of the farmland of this case or in an area adjacent thereto, it is subject to reduction of capital gains tax due to farmland substitute land at the time of the transfer.

(b) relevant statutes;

It is as shown in the attached Form.

C. Determination

First of all, the requirements for reduction of capital gains tax due to farmland substitute land are examined as follows: ① Article 70(1) of the Restriction of Special Taxation Act and Article 67 of the Enforcement Decree of the Restriction of Special Taxation Act exempt capital gains tax on substitute land for farmland for more than three years in total; the purpose of the exemption is to protect farmers through free permission and guarantee of substitution of farmland, or to develop and encourage agriculture (see Supreme Court Decision 2002Du5924, Sept. 5, 2003); ② Article 70(1) of the Restriction of Special Taxation Act defines substitute land as its target; ② Article 70(1) of the Restriction of Special Taxation Act defines substitute land for the purpose of reduction or exemption of capital gains tax due to farmland substitute land, the farmland must be directly cultivated while residing in the location of the previous farmland at the time of transfer; therefore, if residing or cultivated for more than three years in total as alleged by the Plaintiff, it cannot be interpreted that the farmland substitute land is subject to reduction or exemption of capital gains tax due to farmland substitute land.

In the instant case, the Plaintiff had resided in the location of the transferred farmland of this case or in an area adjacent thereto for not less than three years since the time of the transfer from the time of the acquisition to the time of the transfer, and had cultivated the transferred farmland of this case. However, there is no dispute between the parties. However, it is insufficient to recognize that the Plaintiff had directly cultivated the transferred farmland of this case at the time of the transfer of the transferred farmland of this case on the basis that the Plaintiff did not reside in the location of the transferred farmland of this case or in an area adjacent thereto at the time of the transfer of the transferred farmland of this case, and there is insufficient evidence to support that the Plaintiff had directly cultivated the transferred farmland of this case at the time of the transfer of the transferred farmland of this case, and there is no other evidence to support this, the Plaintiff failed to meet the requirements of residence and cultivation for

Therefore, the Plaintiff’s assertion that the transfer of the farmland of this case constitutes the reduction or exemption of capital gains tax on a different premise from the aforementioned legal principles.

3. Conclusion

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