Whether the land used as the place for the sale of flowers Crops falls under one of its own farmland for not less than eight years;

It is insufficient to recognize that the land in this case was actually used for farming with the purpose of gaining agricultural income, and in light of the fact that the land in this case is used as a place for exhibition and sale of flowers and pots as a parking lot while selling flowers, etc., it shall not be deemed that it was farmland for eight years or less.

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

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

The judgment of the first instance shall be revoked. The part exceeding 57,723,340 won of the imposition of capital gains tax of 157,723,340 won against the plaintiff on November 10, 2005 by the defendant shall be revoked.

1. Details of the disposition;

The following facts shall not be disputed between the parties, or may be recognized by taking into account the whole purport of the pleadings in each entry in Gap evidence 1 and Eul evidence 1 through 3 (including paper numbers):

A. The Plaintiff’s father 00 on March 25, 1966 purchased and owned 00 Do 000, 000 Do 326-4 Do 326-4 Do 2,699 m2 (hereinafter “the instant land”) and died on November 15, 1983. The Plaintiff inherited the instant land and transferred it to 00 on May 27, 2004, and upon filing a preliminary return of transfer income tax, the Plaintiff applied for reduction of transfer income tax on the transfer margin on the ground that the instant land constitutes “self-farmland for over eight years” under Article 69(1) of the former Restriction of Special Taxation Act (amended by Act No. 7322, Dec. 31, 2004; hereinafter “former Restriction of Special Taxation Act”).

B. As to this, the Defendant excluded the application for reduction or exemption on the ground that the instant land was not farmland at the time of transfer, and imposed KRW 157,723,340 on November 10, 2005 on the Plaintiff (hereinafter “instant disposition”).

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

From March 1966, the Plaintiff’s father Lee 00, from around November 1983 to around eight (8) years, the Plaintiff liveded in 00,000 and 60-4 from the time of the acquisition of the instant land to the time of the transfer of the instant land. At the time of the Plaintiff’s transfer of the instant land, the instant land was farmland at the time of the transfer, which was sold by the flowerers, who leased the instant land, while cultivating the landscape trees and flowers that are flower crops, influences, as part of the instant land, and thus, the instant land was farmland at the time of the transfer. As such, the income accruing from the transfer of the instant land should be exempted from capital gains tax pursuant to the provisions of Articles 69 and 133 of the former Restriction of Special Taxation Act, but the disposition that did not exempt it is unlawful.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

(1) According to Article 69(1) of the former Restriction of Special Taxation Act, Article 66(1), (4), and (5) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 18704, Feb. 19, 2005) (amended by Presidential Decree No. 18704, Feb. 19, 2005), in order for the Plaintiff to have the capital gains tax reduced or exempted from the transfer of the instant land, the pertinent land must be continuously cultivated while residing in

(2) First, comprehensively taking account of the purport of the entire pleadings in each of Gap evidence Nos. 3, Gap evidence Nos. 5 through 7 (including each number), and Eul evidence Nos. 2, the fact that the plaintiff resided in the same Gu or Gu as the location of the land of this case for at least eight years from 1966 to 197, and owned the land of this case and cultivated rice directly by cultivating rice, and there is no reflective evidence.

(3) Next, we examine whether the instant land was used as farmland at the time of transfer on May 27, 2004.

Comprehensively taking account of the overall purport of the arguments in Eul evidence Nos. 2 and Eul evidence Nos. 3 (including paper numbers), the land category on the register of the land in this case is the answer form, and it can be acknowledged that the plaintiff leased the land in this case to ○○○, ○, and ○○○ (hereinafter referred to as "○○, etc.") who is a flowerer from 1988 to the time of transfer. However, it is insufficient to recognize that the entry of evidence No. 2 was insufficient to recognize that the plaintiff or ○○, etc. actually used the land in this case for farming, such as cultivating flowers for the purpose of earning agricultural income from the land in this case, and there is no other evidence to acknowledge otherwise. Rather, in full view of each entry in Eul evidence Nos. 2 through 4, Eul evidence Nos. 9 through 11 (including each number), it is difficult to view that ○○, etc. used the land in this case as the place of exhibition and sale of the land in this case, and that ○○, etc. was installed as the above after sale of the land in this case.

(4) Therefore, the instant land cannot be deemed the subject of exemption from capital gains tax under the former Restriction of Special Taxation Act. Ultimately, the instant disposition taken by the Defendant against the Plaintiff is lawful.

(5) Meanwhile, by reducing the tax burden on the transfer of farmland, the transfer income tax on self-arable farmland is reduced or exempted under the former Restriction of Special Taxation Act as part of the land farming policy to protect small farmers and to foster and encourage agriculture. As recognized earlier, in light of the circumstances that the Plaintiff leased the instant land from 1998 to francers at the time of transfer and did not use the instant land as farmland, it cannot be deemed that the transfer of the instant land, which was not actually cultivated by the Plaintiff as of the transfer date, was transferred under the temporary closure.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit, and the judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is without merit, and it is so decided as per Disposition.

Related Acts and subordinate statutes

former Restriction of Special Taxation Act (amended by Act No. 7322 of Dec. 31, 2004)

Article 69 (Abatement or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

(1) With respect to the income accruing from a transfer of land prescribed by the Presidential Decree, which is directly cultivated by a resident prescribed by the Presidential Decree residing in the location of the farmland for not less than eight years [in case where the farmland in the agricultural promotion area under Article 32 of the Farmland Act is transferred to the Korea Agricultural and Rural Infrastructure Corporation (hereafter in this Article, referred to as the "Korea Agricultural and Rural Infrastructure Corporation") or to the corporation prescribed by the Presidential Decree which mainly runs the agriculture (hereafter in this Article, referred to as the "agricultural corporation"), not later than December 31, 2005, not later than five years, and not later than three years, in case where the farmland eligible for direct payments for managerial transfer prescribed by the Presidential Decree is transferred to the Korea Agricultural and Rural Infrastructure Corporation or the agricultural corporation] and which is prescribed by the Presidential Decree, the tax amount equivalent to 10/100 of the transfer income tax shall be abated or exempted: Provided, That an amount equivalent to 10/100 of the income tax shall be abated or exempted, limited to the income accruing from such land to the residential area, etc.

(3) Any person who intends to be subjected to paragraph (1) shall apply for tax abatement or exemption as prescribed by the Presidential Decree.

Article 133 (Aggregate Ceiling of Abatement or Exemption of Transfer Income Tax)

(1) Where the total amount of transfer income to be reduced or exempted by an individual under Articles 43, 69, and 77 of this Act or Article 29 of the Addenda of this Act exceeds 100 million won by taxable period, the amount equivalent to such excessive portion shall not be reduced or exempted, and with respect to the calculation of the aggregate ceiling of reduction or exemption, it shall be governed by the Presidential Decree.

Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 18704, Feb. 19, 2005)

Article 66 (Reduction or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

(1) For the purpose of the main sentence of Article 69 (1) of the Act, the term “resident prescribed by the Presidential Decree residing in the location of farmland” means a person who has cultivated while living in the area falling under any of the following subparagraphs for not less than 8 years (in case of transfer of the land to the Korea Agricultural and Rural Infrastructure Corporation (hereafter in this Article, referred to as the “Korea Agricultural and Rural Infrastructure Corporation”) or to the corporation under paragraph (2), 5 years; and in case of transfer of the land to be eligible for the payment of subsidy for management transfer under paragraph (3) to the Korea Agricultural and Rural Infrastructure Corporation or the corporation under paragraph (2), 3 years) (including the area corresponding to the relevant area at the time of commencing a cultivation, but comes not to fall under an administrative district):

1. An area in a Si/Gun/Gu (referring to an autonomous Gu; hereafter the same shall apply in this paragraph) where farmland is located;

2. An area within a Si/Gun/Gu adjacent to an area referred to in subparagraph 1.

(4) For the purpose of the main sentence of Article 69 (1) of the Act, the term “land as prescribed by the Presidential Decree” means the farmland, which is subject to the payment of management transfer subsidies under paragraph (3), has been cultivated by himself for not less than 8 years (in case of transfer of the farmland to the Korea Agricultural and Rural Infrastructure Corporation or the corporation under paragraph (2), 5 years; and in case of transfer of the farmland subject to the payment of management transfer subsidies under paragraph (3), 3 years) from the time of acquisition until the time of transfer, excluding the farmland falling under any of the following subparagraphs. In this case, in the calculation of the period of farmland inherited, the period acquired and cultivated by the decedent shall be deemed the period that the heir cultivates:

1. Farmland located in the Special Metropolitan City, Metropolitan City (excluding any Gun located in any Metropolitan City), or Si (excluding any Eup/Myeon area of a Si in the urban and rural complex form established under Article 3 (4) of the Local Autonomy Act), as of the transfer date, for which three years have passed from the date of incorporation into such area as farmland located within a residential, commercial, and industrial area under the National Land Planning and Utilization Act: Provided, That farmland incorporated into a residential, commercial, or industrial area under the National Land Planning and Utilization Act as a result of the implementation of a development project in a large-scale development project area falling under any of the following items (referring to a single project execution area in which project approval is identical), which

(a) An area with at least 1,00 landowners within the project execution area;

(b) Area where the project area is larger than that prescribed by Ordinance of the Ministry of Finance and Economy;

2. Where any land other than farmland has been designated prior to the date of a replotting disposition, the farmland for which three years have elapsed from the date of such designation.

(5) The farmland subject to paragraph (4) shall be based on the farmland as of the date of transfer under Article 162 of the Enforcement Decree of the Income Tax Act as of the date of transfer: Provided, That where a purchaser has altered the form and quality of farmland and started construction in accordance with the terms and conditions of a sales contract before the transfer date, it shall be based on farmland as of the date of the sales contract, where the relevant farmland has been designated as a land scheduled for replotting other than farmland before a disposition of replotting, and where it has become impossible to cultivate by implementation of construction works for creating a land after three years have elapsed from the date of the designation of the land scheduled for replotting, it shall be based on the farmland as of the date of commencing the construction works for creating the land.

(9) Any person who intends to apply for abatement or exemption of the transfer income tax under Article 69 (3) of the Act shall furnish, to the head of tax office having jurisdiction over the place of tax payment, an application for abatement or exemption as prescribed by the Ordinance of the Ministry of Finance and Economy, along with his tax base return (including the preliminary return) for the taxable year whereto belongs the date of transfer of relevant farmland. In this case, where he transfers to the corporation under paragraph (2), he shall furnish an application for abatement or exemption along with the relevant transferee.

Enforcement Regulations of the Restriction of Special Taxation Act (amended by Ordinance of the Ministry of Government Administration and Home Affairs No. 421 of March 11, 2005)

Article 27 (Scope, etc. of Farmland)

(1) The paper under Article 66 (3) of the Decree shall be the dry field and paddy field, which are the land actually used for cultivation regardless of the land category on the public cadastral book, and shall include the farming shed, compost, pumping station, pumping station, branch office, density, waterway, etc. directly necessary for the management of farmland.

(2) The confirmation of whether a person falls under the land under the provisions of Article 66 (3) of the Decree shall be made according to the following criteria:

1. It shall be the land which is confirmed that the transferor has owned for not less than eight years (five years in the case of transfer to the Korea Agricultural and Rural Infrastructure Corporation established under the Korea Agricultural and Rural Infrastructure Corporation and Farmland Management Corporation Act, agricultural partnership established under the Framework Act on Agriculture and Rural Community, and agricultural corporation);

2. It shall be the farmland ledger issued or issued by the certified copy of the resident registration, a Si/Gu/Eup/Myeon, and the farmland ledger which is verified as of the date of transfer by the transferor, while residing in the location of farmland for not less than eight years (five years in the case of transfer to the Korea Agricultural and Rural Infrastructure Corporation under the Korea Agricultural and Rural Infrastructure Corporation and Agricultural Infrastructure Corporation Act, farming associations under the Framework Act on Agriculture

(3) The term "scale prescribed by the Ordinance of the Ministry of Finance and Economy" in Article 66 (3) 1 (b) of the Decree shall be one million square meters, but in the case of a housing site development project under the Housing Site Development Promotion Act or a housing site preparation project under the Housing Act, it shall be one million square meters.

Finally.