early 2014 Heavy1417 (2015.03.02)

No person shall be a self-arable farmland for at least eight years for which capital gains tax is reduced.

It is insufficient to recognize that the farmland in question was directly cultivated by engaging in the cultivation of crops in the key farmland or cultivating one-half or more of the farming works with his own labor.

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

2015Guhap4509 Requests for revocation of imposition of capital gains tax, etc.

OraA

○ Head of tax office

November 04, 2015

December 09, 2015

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, out of the imposition of capital gains tax of KRW 000,000 for the year 2012 against the Plaintiff on December 1, 2013, shall be revoked.

1. Details of the disposition;

A. The Plaintiff, his father, around May 26, 1998, transferred 14 parcels of land, including 13,193 square meters, 13,193 square meters, 233, 7,107 square meters, 234, 9,836 square meters, and 234, 234, 336 square meters, hereinafter referred to as “written application for reduction and exemption,” and 1 unit of housing, to the Non-Party CC, including 14 parcels of land and 1 unit of housing, which were donated to the non-party 20,000,000 won, and the remainder date is October 31, 2012.

B. On November 14, 2012, the Plaintiff reported the transfer income tax on the said transferred real estate to the Defendant, and filed an application for reduction or exemption with respect to the full amount of the transfer income tax on the land subject to reduction or exemption by asserting that the land subject to application for reduction or exemption falls under “self-Cultivating farmland for at least eight years” as stipulated in the main sentence of Article 69(1) of the former Restriction of Special Taxation Act (amended by Act No. 11614, Jan. 1, 2013; hereinafter the same shall apply).

C. However, the director of ○○○ Regional Tax Office conducted a regular audit on the ○○ Tax Office, and notified the Defendant of the imposition of capital gains tax on the farmland for which the Plaintiff did not meet the requirements of the instant reduction provision as farmland not cultivated directly. Accordingly, the Defendant determined that the Plaintiff did not directly cultivate the farmland for which the application for reduction was filed, and denied the reduction or exemption of capital gains tax on the farmland for which the application was filed, and on December 1, 2013, denied the reduction or exemption of capital gains tax on the farmland for which the Plaintiff did not directly cultivate the farmland for which the application was filed. On December 1, 2013, the Plaintiff issued a notice of the reduction or exemption (including the additional tax for bad faith in payment) as the capital gains tax reverted to the year 2

D. On February 19, 2014, the Plaintiff dissatisfied with the instant disposition and filed a request for a trial with the Tax Tribunal on February 19, 2014, but the decision of dismissal was rendered on March 2, 2015.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Since the Plaintiff donated the controversial farmland from the OB on May 26, 1998 to the date immediately before ○○ school located in ○○○ City was transferred to ○○ school on July 1, 2007, the key farmland falls under self-Governing farmland for not less than eight years prescribed by the reduction or exemption clause of this case, and accordingly, the portion imposing capital gains tax of KRW 00,000,000 for the key farmland among the dispositions of this case issued on different premise should be revoked as it is unlawful.

B. Relevant statutes

Attached Form 3 is as shown in the "relevant Acts and subordinate statutes".

C. Determination

1) This case’s reduction or exemption clause provides that “The tax amount equivalent to 10/100 of capital gains tax shall be reduced or exempted for the income accruing from the transfer of land prescribed by Presidential Decree among the land that a resident prescribed by Presidential Decree residing in the seat of a farmland for not less than eight years," and Article 66(13) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 26070, Feb. 3, 2015; hereinafter the same shall apply) (amended by Presidential Decree No. 19329, Feb. 9, 2006; hereinafter “direct farming” means that a resident is engaged in the cultivation of crops or perennial plants in his/her own farmland for a long time, or in the cultivation or cultivation of his/her own farmland for a long period of time, and it is reasonable to interpret that the owner of farmland is directly engaged in or directly engaged in the farming of farmland for another person’s own purpose, by preventing the reduction or exemption of capital gains tax from being imposed on his/her own farmland.”

Furthermore, the burden of proving the fact of directly cultivating the transferred land for not less than eight years while residing in the location of the land is imposed on a person liable to pay capital gains tax pursuant to the relevant provision, and the fact that the transferred land was used as the farmland is recognized, and thus, it is not presumed that the transferor has done so (see, e.g., Supreme Court Decisions 94Nu996, Oct. 21, 1994; 2002Du7074, Nov. 22, 2002).

2) In light of the above legal principles, in light of the following circumstances, it is insufficient to recognize that the Plaintiff had been engaged in cultivating crops in the key farmland or directly cultivated the key farmland by cultivating more than 1/2 of farming work with his own labor, and there is no other evidence to acknowledge otherwise.

A) On July 1, 200, the Plaintiff was appointed as a local steering officer of Grade 10 for the function of ○○○ Office of Education on July 1, 2007, and worked in the Cheongsan Memorial located inside and outside about 25 km from the key farmland until it was moved to ○○ Office of Education on July 1, 2007, and worked in the Dosan Memorial located inside and outside 25 km from the key farmland. As such, there seems to have been limited time for the Plaintiff to put into the cultivation of the key farmland during the above period.

B) The Plaintiff, while serving as a public official between 2000 and 2006, has received benefits exceeding 100 million won.

C) Although the Plaintiff stated in the farmland ledger that the ownership of the farmland at issue is self-fluence while owning the farmland at issue, it is difficult for the Plaintiff, who is a public official, to directly cultivate the farmland at issue, when the area of the farmland at issue exceeds 41,181 square meters (per approximately 12,457 square meters) in total. The farmland ledger is merely an internal data prepared and kept by the Plaintiff for the efficient implementation of farmland management and agricultural policies, and the farmland ledger is merely an internal data prepared and kept for the purpose of the efficient implementation of the farmland management and agricultural policies, and it is not sufficient for administrative authorities to conduct a substantial examination thereof. Thus, it is difficult to view that there is sufficient credibility in the above farmland ledger.

D) The instant farmland is also the area of 20,300 square meters and it is a very wide area for the Plaintiff, not a professional farmer, but a direct farming. However, it is recognized that the Plaintiff purchased a sowing machine that should have been on May 12, 2004 after a donation of the farmland at issue, and there was no objective evidentiary materials to recognize that the Plaintiff had possessed any particular farming machine before and after that donation. Moreover, the Plaintiff did not submit objective and direct evidence on the sales details of the Gain cultivated in the farmland at issue, seeds and seedlings necessary for the cultivation of the farmland at issue, and fertilizer purchase details.

E) On June 4, 2013, in the course of an on-site investigation into the farmland applied for reduction or exemption by the employee DDD belonging to the Defendant, a neighbor who prepared and ordered the confirmation to the Plaintiff, stated that “OB, the father of the Plaintiff, cultivated by OB, the father of the actual Plaintiff, and the Plaintiff visited the weekend to the end of the week, thereby making a loss.”

F) The Plaintiff asserts that OB made a donation to the Plaintiff on ten lots of farmland including the farmland in question due to the lack of self-sufficiency due to the depression, etc. However, from 1998 to 2007, OB was 55 to 64 years of age, the key period, and there was no medical record to deem that OB had difficulties in specially giving up farming houses. Rather, it is recognized that OB had been supplied with duty-free petroleum for power-driven season since 2004, and that it had been purchased agricultural chemicals and fertilizers from EE as members of the EEF from 2008 to 2012.

G) In addition, the Plaintiff submitted the confirmation document of the former FF by asserting that “the Plaintiff, at the time of the instant application for reduction and exemption, suspended direct cultivation of the reduced farmland due to the transfer in around 2007, and Nonparty FF leased the farmland for reduction and took over the mountain period that was planted on that ground.” However, it is only recognized that the former FF paid the rent or the payment on several occasions to the account in the name of OB, not the Plaintiff, rather than the Plaintiff.

H) Also, in light of the above circumstances and the methods of preparing the documents, details, the relationship between the originator and the Plaintiff, the person preparing the document, and the health status of the high-CC and the formerF written confirmation (Evidence A5) submitted by the Plaintiff as evidence, it is insufficient to serve as objective evidence for the Plaintiff’s self-defense requirements.

3) Thus, the defendant's disposition of this case which imposed capital gains tax without applying the instant reduction and exemption provisions to the farmland at issue, judged that the plaintiff did not cultivate the farmland directly, is legitimate.

3. Conclusion

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