National Tax Service Review and Transfer 2015-0039 ( October 30, 2015)

It is difficult to see that farmland has been self-caped for not less than eight years.

It is difficult to regard that he/she has been engaged in the cultivation of land at all times or has cultivated at least 1/2 of the farming work with his/her own labor, and there is no objective data to recognize otherwise.

Article 69 of the Restriction of Special Taxation Act for Self-Cultivating Farmland

2015Guhap22460 Action demanding revocation of a disposition imposing capital gains tax

○ ○

○ Head of tax office

d. 2, 2016

oly 2016.16

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 capital gains tax of KRW 00,00,000 (including additional tax) for the year 2014 against the Plaintiff on December 15, 2014 shall be revoked.

1. Details of the disposition;

A. On June 3, 2005, the Plaintiff acquired and possessed a lot of land (hereinafter “instant land”) prior to ○○○○-○○○○○○○○○○○○○, and transferred the instant land to KRW 00,000,000.

B. On March 31, 2014, the Plaintiff filed an application for reduction of or exemption from capital gains tax under Article 69(1) of the former Restriction of Special Taxation Act (amended by Act No. 13560, Dec. 15, 2015; hereinafter the same) with the Defendant upon filing a preliminary return on the tax base of capital gains tax for the year 2014 following the transfer of the instant land.

C. On December 15, 2014, the Defendant issued a notice of correction of capital gains tax of KRW 00,000,000 (including additional tax) for the year 2014, on the ground that “the Plaintiff did not own the instant land for at least eight (8) years from the date on which the Plaintiff acquired the instant land,” and excluded the application of capital gains tax reduction and exemption.

D. The Plaintiff dissatisfied with the instant disposition and requested an examination to the Commissioner of the National Tax Service on March 17, 2015, but the said request for examination was dismissed on June 30, 2015.

[Ground of recognition] Facts without dispute, Gap evidence 1, 9 evidence, Eul evidence 1 and 2 (including branch numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

From the time when the Plaintiff acquired the instant land ¡¿ (i.e., neighboring the instant land 】 Si 】 Si 】 】 Si x x Myeon, etc. in the instant land, and such land 】 (ii) 】 is merely the Plaintiff’s advice on Ord Agriculture’s History or the Plaintiff’s request for work as a farmer. Therefore, the instant land constitutes an exemption from capital gains tax under Article 69(1) of the former Restriction of Special Taxation Act, and thus, the instant disposition taken on a different premise is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

1) This 】 On October 27, 2014, the following written confirmations (hereinafter referred to as “instant confirmations”) were prepared by public officials belonging to the △△ Tax Office.

○ Location (workplace): The land of this case

○ Corporate name (trade name): △△D farm

○ Facts of confirmation

- The reasons for farm start-up: Around six years prior to the retirement of approximately six years, the plaintiff was suffering from seedlings on the land in which heavy equipment was mobilized and developed, but management was difficult, and the seedlings was not well grow, and the plaintiff's husband and her husband will be good for joint management after retirement, and the plaintiff and her husband will be good for joint management in full-time.

- The details of farmland management: From 2011 to 2011, sales have been generated in the year 2013 (as much as five million won).

- There is no detailed amount of investment that is various composts, fertilizers, agricultural chemicals, etc. at the time of farmland management, but there is a need for approximately 6 million won.

- When the normal sale occurs, the amount of half-class price of the sale shall be reduced at its own expense (e.g. compost, fertilizer, pesticide, personnel expenses, and other equipment);

Corporate name or trade name: △△D farm

Positions: Manager:

Name: This 】

2) Meanwhile, from January 2014 to June 2014, the Plaintiff transferred land in addition to the instant land 】 Gyeongnam x x 3 parcels, such as Ri 9-5 x x 9-5 x x 139 land and x x City x x x 480 x 480 x 480-4 land (hereinafter referred to as "total land above x Ri x Ri x Ri x Ri land, etc.") to the tax authority, and applied for reduction or exemption of capital gains tax. In this regard, the details of the Plaintiff and the Plaintiff's husband's husband's statement to public officials belonging to the △△△△△△ on October 2014 are as follows:

o) For you shall speak about you’s occupation.

I have no special occupation.

-) Whether the past operational fact has occurred since 2006 since the commencement of real estate trading business.

There is no memory that the project is operated.

(E) How the circumstances leading up to the acquisition by a majority of real estate are as follows.

I may know in detail the circumstances of acquisition. I select and sell the land mainly by her husband and do not know in detail.

(E) 204 】 (2004 x Myeon) while residing in the △△△△. The reason why the director was removed shall be the reason why the director was removed.

The answer) ¡¿ The original highest letter is returned to the Republic of Korea.

(m) January 2010 】 (1) 】 (2010 】 (2) 】 (3) 】 (4) 】 (3) 】 (4) 】 (4

In the process of acquiring land, I have moved the address at the time.

L) 】 Military 】 Area 】 】 139 】 what crops were raised.

I may know well. The husband may know well.

L) 】 Military 】 area 】 】 9-5 】 what crops were planted on two parcels;

I may know well. The husband may know well.

(hereinafter referred to as her husband's answer on behalf of her husband)

m) Where fertilizers and composts are purchased, whether they are dnicking

답) ×× 동남부농협에서 샀습니다.

(E) by explaining the developments leading up to the purchase of the instant land;

(The answer) The newspaper articles introduced by the auction have been reported and participated in the auction.

(E) How the proceeds have been prepared.

The answer) primarily received the loan and purchased.

m) The loan interest rate is up to one year; and

(P) The maximum amount of KRW 1500 to KRW 18 million per month.

(E) how the interest of KRW 200 million per year during agricultural income from the previous 1st year is all over.

The answer) receive additional loans as security and pay interest on the farmland in possession.

m) The amount of agricultural income generated from the instant land is how much.

The answer is rarely possible until now and future.

m) The land of this case was managed from time to time.

The answer was made from 2006.

d) What the crops were raised on the instant land

The answer was first raised in the ancient city, but the deaf company was aware of, and after 2006, the mulberry tree was planted.

Does they have dice entirely before trading with x x sn't you have d't d'?

(The answer) The head of Dol, which has been managed in 2012, was the relationship with which the head of Do has been submitted by force and the management has been well known, and the head of Dol, requested the management thereof x x the management thereof.

How is the management cost.

The answer was to be paid when harvested. (The answer) At the time of harvest.

(E) whether the management costs have been paid or not.

The answer) Although the amount of KRW 5 million has been harvested in the following year, it is not possible to set an accurate distribution rate for distribution with income yet to be accrued.

(E) how often the mulberry tree fertilizer and manure can be produced.

(1) At the time of the 10,000 won or less per month (10,000 won or more).

m) these 】 how we became aware of the 】C

The answer) x Dogg-ri was well aware of this x Dogg-ri was left to the head of Si/Gun/Gu by having the head of Si/Gun/Gu listen to the horses that the farm management would be difficult, x x Dog-ried farm management.

3) The distance between the instant land and the Plaintiff’s domicile is about 28 km along a straight line, and about 45 km on the road on the road of a motor vehicle.

4) The Plaintiff acquired a total of 11,932 square meters of land from 2006 to 2014 and transferred a total of 110,282 square meters, but there was no global income tax return from 2009 to 2013. The Plaintiff’s husband’s Yoo-gu from July 7, 2002 to April 18, 2006, and from May 23, 2013 to May 23, 2013 】 (i) city 】 (ii) real estate brokerage business in the area 】 (iii).

[Ground of recognition] Facts without dispute, each evidence before the dispute, Gap evidence No. 11, Eul evidence No. 3 and 4, witness's objection 】 partial testimony and the purport of whole pleadings

D. Determination

1) According to Article 69(1) of the former Restriction of Special Taxation Act and Article 66 of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 26070, Feb. 3, 2015), a transferor shall be exempted from the transfer income tax as his/her own farmland if he/she resided in the Si/Gun/Gu where the farmland is located or in an area within 20km from the farmland in question, or in a Si/Gun/Gu where the straight line is 20km from the farmland in question, and directly cultivates for at least eight years from the time he/she acquired the land in question until the time he/she transfers the land in question. The "farmland" here means the paddy field. The land used for the real cultivation regardless of the land category on the public register, the "direct cultivation" means that the transferor is constantly engaged in cultivating the crops or perennial plants in his/her own farmland, or cultivates or cultivates at least half of farming works with his/her own labor.

According to the language and text of each provision, the former Enforcement Decree of the Restriction of Special Taxation Act and the former Enforcement Decree of the same Act, it did not separately stipulate the concept of ‘direct cultivation' or ‘self cultivation', which is one of the requirements for exemption from capital gains tax, and the Supreme Court at the time interpreted that the meaning of ‘direct cultivation' or ‘self cultivation' includes not only cases where a transferor cultivates a person under his/her responsibility and account, but also cases where he/she cultivates another person or causes his/her family living together with the same household to cultivate it (see, e.g., Supreme Court Decisions 92Nu4642, Oct. 9, 199; 2003Du2465, May 30, 200; 200Du1665, Oct. 21, 2094; 2000Da16629, Feb. 9, 206, etc.). It is reasonable to interpret the meaning of ‘self cultivation or self cultivation of one-third or more of labor force.

Meanwhile, the burden of proving the fact of directly cultivating the transferred land is against a taxpayer who asserts the reduction or exemption of capital gains tax (see, e.g., Supreme Court Decision 94Nu996, Oct. 21, 1994).

2) In light of the above legal principles, the Plaintiff’s assertion that it was difficult to recognize that the Plaintiff had been engaged in the farming business of this case on the following circumstances: (i) the Plaintiff’s farmland ledger includes the instant land 】 31 m3,388 square meters from the Si, Do, Do, Gyeongnam-gun, △△△, and so on; (ii) it is unreasonable to deem that the Plaintiff directly cultivated the land of this case; (iii) the farmland ledger was prepared for the efficient implementation of farmland management and agricultural policies; and (iv) it is difficult for the Plaintiff to regard that the Plaintiff had been engaged in the farming business of this case on the following grounds: (i) the Plaintiff’s farmland ledger 】 (including the land of this case x (i) the Plaintiff’s farmland ledger 】 (ii) the Plaintiff’s land size and real estate size that the Plaintiff had been engaged in the farming business of this case; and (ii) it is difficult to deem that the Plaintiff had been engaged in the farming business of this case on the following grounds: (i) the Plaintiff’s farmland size and real estate.

3. Conclusion

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