Cho-2015-China-584 (2016.08.30)

The portion of cultivating crops is farmland, and it constitutes land for non-business use if the owner does not re-bed or re-bed with the relevant farmland.

In order to be excluded from non-business land even if the farmland is used for business purposes, the part cultivating crops shall be naturally considered as farmland, and in order to be excluded from the non-business land, the requirements prescribed by statutes, etc.

Article 104-3 (Scope of Non-business Land)

2016-Gu short-2872 Revocation of Disposition of Imposing capital gains tax

AA

o Head of the tax office

2017.05.26

2017.06.09

1. All of the plaintiffs' claims are dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of capital gains tax of KRW 000 for the year 2014 against the Plaintiff on September 1, 2015 is revoked.

1. Details of the disposition;

(1) On September 5, 2002, the Plaintiff, jointly with BB, etc. on September 5, 2002, acquired the instant land from 00:0:00 to 00:00,000, and transferred its ownership shares to CCC on November 26, 2014, the Plaintiff reported and paid 000 capital gains tax for the year 2014 by applying the special long-term holding deduction to the Defendant on January 31, 2015.

She, however, on September 1, 2015, the defendant excluded the special long-term holding deduction for the plaintiff on the ground that it constitutes non-business land, and collected 00 won of capital gains tax for the year 2014.

On October 31, 2015, the Plaintiff lodged an appeal to the Tax Tribunal on the instant disposition. However, the Tax Tribunal dismissed the said appeal on August 30, 2016.

Facts that there is no dispute over the basis of recognition, Gap evidence 4, 5, Eul evidence 4, the purport of the whole pleadings

2. Whether the instant disposition is lawful

(1) At the same time, the Plaintiff used DD as farmland for the purpose of wholesale and retail business of agricultural products by newly building a building ( around 9.3 cubic meters) for the sale of agricultural products in part of it, and newly building a new building for the purpose of wholesale and retail business of agricultural products. If DD agricultural products are viewed only as farmland under Article 104-3 (1) 1 of the Income Tax Act. However, considering DD agricultural products wholesale and retail business together with the act of wholesale and retail, the instant land does not constitute non-business land under Article 104-3 (1) 4 of the Income Tax Act and Article 168-11 (1) 12 of the Enforcement Decree of the same Act and Article 83-4 (14) of the Enforcement Decree of the same Act. Thus, the disposition of this case should be revoked on the premise that DD's land constitutes non-business land under the premise that DD's agricultural products wholesale and retail business.

Article 104-3 (1) of the Luxembourg Income Tax Act provides for farmland in paragraph (1) with respect to "non-business land" subject to exclusion of special long-term holding deduction, for forest land in paragraph (2), for land for stock farm in paragraph (3), and for land other than farmland, forest land, and stock farm land in paragraph (4), there is no room for applying paragraph (4) with respect to farmland.

The plaintiff refers to "farmland" that falls under "farmland, forest land, and stock farm land" from the viewpoint of the cultivation of crops and from the viewpoint of the wholesale and retail business, while "farmland" refers to land actually used for cultivation regardless of its land category as dry field or orchard (Article 88 subparagraph 8 of the Income Tax Act). Even when considering the plaintiff's assertion, the whole land of this case does not fall under "farmland, forest land, and land other than stock farm land" just because some of the land of this case is a building for such purpose. The part cultivating crops falls under farmland as a matter of course, and it cannot be presented at the same time as "farmland, forest land, and stock farm land" in the interpretation of the above Acts and subordinate statutes. Thus, the above provisions concerning "farmland, forest land, and land other than stock farm land" cannot be applied to the part cultivating crops.

In addition, the owner's land constitutes land for non-business as long as the Plaintiff did not re-be and do not own the land. However, according to the proviso of Article 104-3 (1) 1 (a) of the Income Tax Act, Article 168-8 (3) 7 (b) of the Enforcement Decree of the same Act, where the owner is unable to do so due to disease, age, conscription, school attendance, taking public office by election, or other inevitable reasons as provided by Ordinance of the Ministry of Strategy and Finance, and where farmland is leased or used pursuant to Article 23 of the Farmland Act, it is excluded from the land for non-business, but there is no ground to view that the Plaintiff, etc. leased the land of this case to DD

On the other hand, Article 104-3 (4) (c) of the Income Tax Act provides that "land prescribed by Presidential Decree as being directly related to residence or business in consideration of the situation of the use of land among land other than farmland, forest land, and stock farm land, the obligation under related Acts, and the amount of income." ① One of such cases is "........... other similar land prescribed by Ordinance of the Ministry of Strategy and Finance, which is similar thereto, provides "land of which the ratio of income for one year to the value of the land is above the ratio prescribed by Ordinance of the Ministry of Strategy and Finance," and Article 83-4 (14) of the Enforcement Rule of the Income Tax Act provides "........... The wholesale business and retail business for agricultural products (in case of agricultural products, limited to the case of a market under the Distribution Industry Development Act and any other similar place)." However, it cannot be viewed as "the wholesale business of this case" under Article 168-11 (1) 12 of the Income Tax Act.

Therefore, the disposition of this case is legitimate, and the plaintiff's assertion of this case is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed for lack of reason.