Suwon District Court 208Guhap1325 ( October 28, 2008)

National High Court Decision 2007Du2543 ( December 06, 2007)

Whether capital gains tax shall be exempted for farmland for which three years have elapsed from the date of designation;

Where any land, other than farmland, is designated as a land scheduled for replotting before a replotting disposition, the farmland for which three years have elapsed from the date of such designation shall not fall under the self-arable farmland for not less than three years subject to

The contents of the decision shall be the same as attached.

1. The plaintiff's appeal is dismissed.

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

Purport of claim and appeal

The judgment of the first instance shall be revoked. The imposition of capital gains tax of KRW 2,748,424,490 against the plaintiff on January 31, 2007 by the defendant shall be revoked.

1. Acceptance of a judgment of the court of first instance;

The court's reasoning for this case is that "2,748,424,490 won (including additional tax on negligent tax returns 235,963,043 won, additional tax on negligent tax returns 152,89,606 won)" is "2,748,424,490 won (including additional tax on negligent tax on negligent tax returns 235,963,043 won, additional tax on negligent tax on negligent tax payments 152,89,606 won)" of the first instance court's decision. Thus, the court's reasoning for this case is that of the first instance court's decision, except for the plaintiff's conjunctive assertion added in the court's first instance decision as follows, it

2. Additional determination on the plaintiff's preliminary proposal

A. On or before March 21, 1998, the Plaintiff already met the requirements for the cultivation period and the residing period among the requirements for the non-taxation of farmland substitute land, so if transferred at any time and acquired substitute farmland within one year, the Plaintiff was in a position not subject to capital gains tax. Since the land of this case was already formed as trust interest to protect the law prior to the designation of land substitution, the Plaintiff asserts that capital gains tax should not be levied on the land increase from the date of acquisition of the land of this case to the date of

However, as seen earlier, Article 89 subparag. 4 of the Act and Articles 153(2) and 153(4)2 of the Enforcement Decree of the Act provide that in cases where there is a designation of a land to be reserved for replotting other than farmland prior to a replotting disposition, farmland for which three years have elapsed from the date of such designation shall be excluded from capital gains tax, and in light of the principle of strict interpretation of tax laws and regulations, it should be interpreted as they are, and in contrast, it cannot be interpreted that capital gains tax is exempted on the increase in land

B. In addition, the plaintiff asserts that since the 1960s, since the 1960s, a large number of times of loss occurred while operating the Korea Lost Science Institute, the plaintiff would have been expected to take more than 12 billion won as the cost of moving it to other places. The consultation with Suwon-si on the compensation cost was made on May 24, 2004, and that the consultation with Suwon-si on the compensation cost was made on May 24, 2004. As such, the plaintiff's failure to transfer the land of this case within 3 years from the date of the designation of the land scheduled for replotting was justified, imposing additional tax.

However, as alleged by the Plaintiff, it cannot be deemed that there was a justifiable reason for not paying the transfer income tax solely on the ground that there was an anticipated cost required for transplantation of lost trees planted on the instant land, or that consultation related to compensation was delayed. Therefore, the above assertion cannot be accepted.

3. Conclusion

Therefore, the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed, and it is so decided as per Disposition.