early 2010 Heavy1270 ( October 20, 2010)

The purchase price under the sales contract submitted is recognized as acquisition price.

In light of the fact that the transferor’s seal and the receipt’s seal are the same, and that the amount entered in the deposit account was withdrawn at a time similar to the time when the receipt was prepared, the actual transaction is made with the purchase price under the sales contract submitted by the Plaintiff and the separate contract was prepared for submission by the tax office. Therefore, the purchase price under the contract submitted by the

Article 70 of the Restriction of Special Taxation Act: Reduction or exemption of transfer income tax on farmland substitute land

2010Guhap16463 Revocation of Disposition of Imposing capital gains tax

XX

Head of Pyeongtaek Tax Office

October 26, 2011

January 18, 2012

1. The Defendant’s imposition of KRW 143,127,210 against the Plaintiff on March 2, 2010 shall be revoked.

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

The plaintiff stated the date of disposition as of March 10, 2010, but according to Gap evidence No. 1, the date of disposition is March 2, 2010).

1. Details of the disposition;

A. On September 5, 2005, the Plaintiff acquired 1,835 square meters (hereinafter “instant land”) prior to 000 square meters in Pyeongtaek-si, Chungcheongbuk-do (hereinafter “Y-si”), and transferred on September 8, 2008, and acquired 00 m2,281 square meters in the same case on February 20, 2009.

B. Upon reporting the transfer income tax on the instant land, the Plaintiff calculated the transfer margin with the acquisition value of KRW 388,50 million and the transfer value of KRW 693,00,000,000,000, and applied for reduction or exemption of the transfer income tax on the said transfer margin under Article 70 of the Restriction of Special Taxation Act (amended by Act No. 9921, Jan. 1, 2010; hereinafter the same).

C. On March 2, 2010, the Defendant revised the acquisition value of the instant land as KRW 277,55 million to the Plaintiff, and excluded the Plaintiff from the application of Article 70 of the Restriction of Special Taxation Act on the grounds that the period of self-sufficiency of the instant land is less than three years, thereby imposing capital gains tax of KRW 143,127,210 for the year 2008 (hereinafter “instant disposition”).

D. The Plaintiff appealed and filed an appeal with the Tax Tribunal on March 31, 2010, but the Tax Tribunal dismissed the appeal on October 29, 2010.

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, Gap evidence 8-1, 2, Eul evidence 1, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) Although the Plaintiff acquired the instant land from Na, etc., which was the former owner, KRW 388.5 million, the Defendant’s disposition of this case, which imposed capital gains tax by deeming the acquisition value of the instant land as KRW 277.5 million, is unlawful.

(2) Article 70 of the Restriction of Special Taxation Act and Article 67 of the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 22037, Feb. 18, 2010; hereinafter the same) stipulate that a person shall reside in the previous land at the location of the previous land for not less than three years, and do not stipulate that a person shall own the previous land for not less than three years. In light of the purport of the above provision, in order to protect farmers through free permission and guarantee of farmland, or to develop and promote agriculture through free substitution, it is an excessive interpretation to interpret that a person must own land for not less than three years in conformity with the previous land as the requirements for reduction and exemption of capital gains tax pursuant to farmland land. Therefore, the disposition of this case excluded from the application of the above provision on the ground that the Plaintiff did not own the land for

(3) The Plaintiff acquired the instant land from September 2005, and cut down the instant land without being frighted and frighted from around September 2005, and cultivated rice from around spring in 2006 to the time of transfer, and thus, the instant land was self-frighted for more than three years. Therefore, the Defendant’s disposition of this case is unlawful

(4) Even if it is not recognized that the Plaintiff did not own the instant land around September 2005, the actual status of the instant land constitutes a natural resting contest in which it is impossible to hold a farmer from September 2005 to spring in 2006, and the Plaintiff harvested rice from the instant land for three years from September 2006 to 2008, and thus, it should be deemed that the Plaintiff acquired the instant land during the previous ownership period from September 2005 to the transfer. Accordingly, the instant disposition on the ground that the instant land was not self-owned for more than three years is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) As to the acquisition value of the instant land

In full view of the purport of Gap evidence 3-1, 2, and 4-B evidence 4-1 to 4, Eul evidence 10-2, testimony and pleadings of KimB, the sales contract of this case was KRW 380,500,000 on June 8, 2005; KRW 15.00,000 on July 4, 2005; KRW 18,550,000,000 on the receipts of this case; KRW 2.5 billion on the receipts of this case; KRW 75 billion on the receipts of this case; KRW 8.5 billion on the receipts of this case; KRW 75 billion on the receipts of this case; KRW 8.5 billion on the receipts of this case; KRW 75 billion on the receipts of this case; KRW 500,000,000 on the receipts of this case; KRW 8.5 billion on the receipts of this case; KRW 75 billion on the receipts of this case; KRW 300,500,5000.

According to the above facts and the above evidence, although KimB issued a receipt of brokerage commission of KRW 27.7.5 million for the transaction price of the land of this case, it is recognized that the sales contract exists separately from the purchase price of KRW 388.5 million, and the NaA’s seal on the down payment receipt of June 8, 2005 is identical, and the receipts made after July 4, 2005 and the sales contract of KRW 275.75 million were the same as the purchase price of KRW 8.75 billion for the purchase price of the land of this case, and the Plaintiff’s initial sales contract of KRW 8.75 billion for the purchase price of the land of this case was prepared at KRW 7.75 billion for the same time as the date of preparation of each receipt, and the Plaintiff’s initial sales contract of KRW 38.5 billion for the purchase price of the land of this case was prepared at KRW 8.75 billion for the same time as the purchase price of the land of this case.

(2) As to the interpretation of the provision on reduction and exemption by substitute land

Article 67(3)1 and 2 of the Enforcement Decree of the Restriction of Special Taxation Act explicitly stipulates that a person who has cultivated farmland while residing in the former farmland for not less than three years at the seat of the farmland substitute land shall acquire new land or transfer the previous land within one year from the date of acquisition of new farmland due to necessity for cultivation. Thus, in order to reduce capital gains tax on substitute farmland for farmland under Article 70 of the Restriction of Special Taxation Act and Article 67 of the Enforcement Decree of the Restriction of Special Taxation Act, the previous farmland shall be cultivated for not less than three years, and such interpretation cannot be interpreted extensively. Therefore, the Plaintiff’s above assertion is without merit.

(3) As to the assertion that self-defense was made for more than 3 years

According to Article 70(1) of the Restriction of Special Taxation Act and Article 67 of the Enforcement Decree of the Restriction of Special Taxation Act, in order to fall under the reduction or exemption of capital gains tax on substitute farmland, ① previous land and newly acquired land shall be farmland, ② direct cultivation shall be conducted while residing in the previous farmland for not less than three years and residing in the new farmland for not less than three years in addition thereto, and the residing in the new farmland for not less than three years; ③ residing and cultivation shall begin within one year from the date of transfer of previous land; ④ The period between the transfer date of previous land and the acquisition date of new land shall be within one year; and ⑤ The area of newly acquired farmland shall be at least 1/2 of the area of farmland to be transferred

According to the overall purport of the Plaintiff’s farmland ledger, the Plaintiff stated as the Plaintiff’s self-defensiveing of documentary evidence Nos. 6-2 through 4, A’s evidence Nos. 9-1 and 2 from August 14, 2006, the Plaintiff received rice subsidies in 2007 and 2008, and the Plaintiff purchased agricultural materials and fertilizers.

Furthermore, in light of the overall purport of evidence Nos. 2 and 3 as to whether the Plaintiff was self-employed for at least three years, the Plaintiff acquired the instant land under the former owner Na, etc. as he did not cultivate the instant land on or around September 2005, and only through the field low. However, the Plaintiff could not enter the instant land for farming purposes as the Plaintiff did not complete adjacent discussions at the time of acquiring the instant land, and it is difficult to recognize the fact that the Plaintiff did not know rice shed in the instant land for farming purposes from spring spring in 2006 to 3 years. Thus, it is difficult to acknowledge that the Plaintiff transferred the instant land to the former owner Na, etc. on or around September 8, 2008, and there is no evidence to support the Plaintiff’s transfer of the instant land during the period from 205 to 30 years beyond the limit of No. 40 to 5 years beyond the limit of No. 95.

(4) As to the assertion that the ownership period should be deemed to have been self-sufficient during the previous ownership period

In a case where farmland continues to be self-chilled for several years, it shall be deemed that the entire period from the first time to the last time, including the time when the land was acquired, was self-chilled. However, if the time when the land was acquired is a natural holiday due to drilling, etc., the time when the land was acquired is reasonable from the time when the actual self-chill began, and it shall not be deemed that the natural holiday, which was not actually self-chilled, was retroactive to the time when the land was acquired, and that the period of self-chill cannot be calculated by deeming that it was self-chilled from the next year.

As seen earlier, although the Plaintiff acquired the instant land on or around September 2005, the Plaintiff did not meet the requirements of Article 70(1) of the Restriction of Special Taxation Act, and Article 67 of the Enforcement Decree of the Restriction of Special Taxation Act, since it did not own the instant land from spring in 2006, and the Plaintiff’s assertion on this part is without merit.

3. Conclusion

Therefore, since the disposition of this case imposing capital gains tax is unlawful by deeming the acquisition value of the land of this case as KRW 277.5 million, the plaintiff's claim of this case of this case shall be accepted on the grounds of its reasoning, and it is so decided as per Disposition.