Cho High Court Decision 201Do5093 (Ob. 21, 2012)

It is difficult to recognize inheritance land as being a serious one for not less than eight years;

Since the land was transferred three years from the date of inheritance, it is difficult to recognize that the cultivation period of the decedent can be viewed as his cultivation period only when the land was cultivated. In light of the fact that the person works as the representative director of the corporation and received wage and salary, there is no objective data related to the cultivation of dry field crops, etc., it is difficult to recognize that the land was directly

Article 69 of the Restriction of Special Taxation Act

2012Gudan12177 Revocation of Disposition of Refusal to Reduction or Exemption of Capital Gains Tax

Park XX

Director of the District Office

September 14, 2012

November 2, 2012

1. The plaintiff's claim is dismissed.

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

The defendant's disposition rejecting the change of transfer income tax reduction against the plaintiff on September 29, 2011 shall be revoked.

1. Details of the disposition;

A. On May 23, 2002, the Plaintiff acquired 527 square meters and 621 square meters (hereinafter collectively referred to as “instant land”) prior to 00-1, 200-1, the Plaintiff calculated the transfer value at KRW 000, and the acquisition value at KRW 000 on July 8, 2010 and paid KRW 00 and KRW 200,000 by applying the special deduction rate for long-term possession at 30% on September 25, 2010, by deeming the retention period as more than 10 years upon filing a preliminary return of the transfer income tax base on September 25, 2010 under Article 77(1) of the Restriction of Special Taxation Act.

B. On August 1, 201, the Defendant corrected and notified KRW 000 and KRW 000 for special rural development tax on August 1, 201, by applying 24% of the special deduction rate for long-term possession on the ground that the Plaintiff’s possession period of the instant land was between eight and nine years.

C. Thereafter, on August 24, 2011, the Plaintiff filed a claim for correction to the effect that the instant land falls under one of its own farmland for at least eight years, pursuant to Article 69(1) of the Restriction of Special Taxation Act, but the Defendant rendered the instant disposition rejecting the claim for correction on September 29, 201, deeming that the Plaintiff did not meet the requirements for reduction of and exemption from the income tax on the instant land.

[Grounds for Recognition] Unsatisfy, Gap evidence 1 to 3 (including each number), Eul evidence 1, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The Plaintiff’s land was acquired on January 28, 1992 and it was difficult for the Plaintiff to cultivate crops and dysphere, etc. in the instant land until May 23, 2002 (10 years and four months), and the Plaintiff continued to cultivate crops and grow crops until the time of transfer after succession (8 years and two months in their own border period). As such, the instant land falls under one of one’s own farmland for at least eight years and six months as one’s own farmland for at least eight years (8 years and six months in its own border period). The instant disposition by the Defendant on a different premise is unlawful.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

In order to be exempted from capital gains tax on self-owned farmland under Article 69 of the former Restriction of Special Taxation Act (amended by Act No. 10406, Dec. 27, 2010; hereinafter the same applies), a transferor shall directly cultivate for at least eight years. Here, the direct cultivation refers to engaging in cultivating crops or growing perennial plants at all times, or cultivating or cultivating at least half of farming works with his own labor; the period acquired and cultivated by an ancestor shall be deemed the period of cultivation by the heir; however, if the heir does not cultivate inherited farmland, the period of cultivation by the decedent shall be deemed the period of cultivation by the heir after acquiring and cultivating the land shall be deemed the period from the date of inheritance until the date on which three years elapse from the date of inheritance [Article 69(1) of the former Restriction of Special Taxation Act; Article 66(4) and (11) through (13) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 22583, Dec. 30, 201).

Considering the following circumstances: (a) there is no dispute between the parties; (b) evidence Nos. 8, 14, 27, 28, and 28; (c) evidence Nos. 2 (including each of the above numbers); and (d) evidence Nos. 8 through 11, 13 through 22, and 26 (including each number); and (c) evidence Nos. 8 through 26; and (d) evidence Nos. 1 and 6 (including each number) evidence Nos. 8 through 11, 13 through 22, and 26; and (b) evidence No. 1/2 or more of the production of crops or perennial plants are insufficient to recognize that the Plaintiff had been engaged in cultivating or growing them with his own labor for at least eight years from the land in this case; and (c) the Plaintiff’s assertion that the period of cultivation of the land in this case can be considered as the Plaintiff’s period of cultivation; and (d) there is no other evidence to acknowledge that the Plaintiff’s assertion is legitimate.

① Until August 14, 2006, the instant land was created by the farmland ledger in the name of the Plaintiff as to the instant land, and in the name of the Sil ParkA, the farmland ledger was not established as to the instant land.

(2) There is no objective data on purchase records, such as pesticides, seedlings, etc. of the Plaintiff or Simba, in connection with the cultivation of dry field crops on the instant land, regardless of whether before or after the creation of the farmland ledger.

③ As the representative director of the OO, the Plaintiff obtained an annual average of approximately KRW 000 from 2002 to 2009, the said company’s income amount from approximately KRW 000 to KRW 000 each year between KRW 200 and KRW 2010 each year, and the network Park Poe also held office as the representative director of the said company prior to the acquisition of the instant land, and the Plaintiff appears to have taken office as the representative director of the said company after the death of the deceased Park Jong-A, and the date of incorporation of the said company was April 22, 1987.

④ In filing a preliminary return of the tax base of capital gains tax on the land of this case, the Plaintiff did not apply 100% reduction or exemption of capital gains tax on self-owned farmland for at least eight years, and only 20% reduction or exemption of capital gains tax on land for public services. If the Plaintiff’s assertion on the direct cultivation period between the Plaintiff and the deceased Park Park ParkA, such preliminary return would not be deemed to have been made.

⑤ The certificate of carrying out, receipt and sales slip (No. 14-1 through 19) submitted by the Plaintiff to prove the details of the transaction with a third party in connection with the direct cultivation of the instant land are related to the display of gold, etc., and it seems that it is not related to the cultivation of agricultural crops or perennial plants.

(6) According to witness B’s testimony, a person who mainly cultivated the instant land during the period in which the Plaintiff owned the instant land can peep into the Plaintiff’s wife, the Plaintiff’s dynamicsCC, and his wife rather than the Plaintiff. Considering this, it is difficult to view that the Plaintiff’s cultivation or cultivation of at least 1/2 of the farming work during the period in which the Plaintiff had owned the instant land as his own labor force is difficult.

3. Conclusion

Thus, the plaintiff's claim is dismissed as it is without merit.