Daejeon District Court-2015-Gu Group-100541 (29. 2016.09)

Cho Jae-2015- Daejeon-780 ( October 15, 2015)

The validity of the exclusion of the reduction or exemption of self-arable farmland for at least eight years, considering the land of this case as farmland for which three years have passed since it was incorporated into a residential area;

Although the land of this case is alleged to be responsible for the delay of the above development project as farmland incorporated into the residential area due to the execution of the development project, it is not the land incorporated into the residential area due to the execution of the development project, so the plaintiff principal

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

Daejeon High Court 2016Nu12705 Revocation of Disposition of Imposing capital gains tax

최@@외 1인

O Head of tax office

Daejeon District Court 2015Gudan100541 (No. 29, 2016)

December 1, 2016

December 2, 2016

1. The plaintiffs' appeal is dismissed.

2. The costs of appeal are assessed against the Plaintiffs.

The judgment of the first instance shall be revoked. The defendant's imposition of capital gains tax of KRW 100,705,760 on October 1, 2014 against plaintiff ***, the imposition of capital gains tax of KRW 100,705,760 on the year 2012 and the imposition of capital gains tax of KRW 104,393,940 on the plaintiff **, respectively, shall be revoked.

1. Quotation of judgment of the first instance;

The reasoning for the court’s explanation concerning the instant case is as stated in the reasoning of the judgment of the first instance, except for the cases cited in the following paragraph (2) or adding the judgment in the following Paragraph (3). As such, this Court’s reasoning is cited in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure

2. Parts to be dried;

On the 5th judgment of the first instance court, the "O District" in the 2nd part of the 5th judgment has been done as "**", and the "O District Designation" in the 12th part of the same side has been done as "Urban Development Zone Designation".

3. The decision on addition (the decision on the plaintiff's assertion of addition to the trial)

A. Summary of the plaintiffs' assertion

Article 66 (4) 1 (c) of the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 24368, Feb. 15, 2013; hereinafter referred to as the "amended Enforcement Decree") newly established a provision that "capital gains tax reduction or exemption even in cases where farmland was transferred after three years from the date of the phased implementation or delayed compensation of large-scale development projects implemented within three years from the date of incorporation into a residential area, etc." The land in this case constitutes capital gains tax reduction or exemption even under the established rules of the Ministry of Strategy and Finance, which provides the same details before the said provision was newly established, and thus, the Plaintiffs satisfied the requirements for capital gains tax reduction or exemption due to the transfer of the land in this case. Accordingly, the Defendant’s disposition

B. Determination

In light of the following circumstances, inasmuch as the Plaintiffs transferred each of the instant land on May 30, 2012, the instant land does not fall under the subject matter of Article 66(4)1(c) of the Enforcement Decree of the amended Enforcement Decree, and it cannot be interpreted that the instant land falls under the subject matter of capital gains tax reduction on the grounds of an established rule which is not externally binding contrary to the legislative intent explicitly restricted after February 15, 2013, on the grounds that the point of application of the amended Enforcement Decree does not fall under the subject matter of capital gains tax reduction.

(1) Article 66 (4) 1 (c) of the Enforcement Decree of the amended Act provides that "Where three years have passed since the date of incorporation into a large-scale development project (limited to cases where there are located in a large-scale development project area) in the relevant area due to the phased implementation of the project or delay in compensation by phase, as farmland incorporated into a residential area, commercial area, and industrial area under the National Land Planning and Utilization Act within three years after incorporation into the land subject to reduction or exemption of capital gains tax by newly establishing a new type of item (c), the capital gains tax shall be exempted pursuant to Article 69 of the Act on Special Cases concerning the Restriction of Taxation and Article 66 of the Restriction of Special Taxation Act and Article 66 of the Restriction of Special Taxation Act.

(2) However, Article 2 (3) of the Addenda to the Enforcement Decree of the amended Enforcement Decree provides that "the amended provisions on capital gains tax of this Decree shall apply to the portion transferred after this Decree enters into force," and Article 1 (Enforcement Date) provides that "this Decree shall enter into force on the date of its promulgation," respectively, and the reduction or exemption of capital gains tax under Article 66 (4) 1 (c) of the amended Enforcement Decree limits the scope of application on the land transferred after February 15, 2013.

(3) In addition, the fact that the established rules and regulations regarding the standards for interpretation of tax-related Acts have been enacted and announced cannot be deemed as having such interpretation or practices, and it cannot be said that they have external binding force in determining the rules and regulations equivalent thereto inside the legal relations (see, e.g., Supreme Court Decisions 83Nu54, Jun. 14, 1983; 86Nu96, May 26, 1987).

4. Conclusion

If so, the plaintiffs' claims are dismissed in its entirety due to the lack of reason, and the judgment of the court of first instance is so dismissed.

As the conclusion is justified, all appeals by the plaintiffs are dismissed. It is so decided as per Disposition.

December 2, 2017