Whether the land of this case is farmland subject to reduction or exemption of capital gains tax by self-defense for eight years after transfer.

It is judged that the land in the case is not farmland at the time of transfer, considering the fact that the guest soil work was completed to convert the land into land for factory and that the permission for farmland diversion and factory construction was completed.

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

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of KRW 62,772,100 on January 10, 2006 against the Plaintiff shall be revoked.

1. Details of the disposition;

A. On May 20, 1995, the Plaintiff donated 530 m2, 4774 m2 (hereinafter “the land in this case”) to the head of the Sinsan-si, Chungcheongnam-do and transferred the land to the head of the Sinsan-si on April 13, 2004, the Plaintiff applied for reduction of capital gains tax on the ground that the land in this case constitutes “self-farmland for not less than 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 on January 10, 2006, rendered the instant disposition imposing capital gains tax of KRW 62,772,100 on the Plaintiff for the year 2004.

[Ground of recognition] The entry of Gap evidence 1, 2, Eul evidence 1, 2, and 2, and the purport of the whole pleading

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff acquired the instant land and transferred it to the time of transfer, and thus, the instant land was farmland at the time of transfer. Therefore, the instant disposition that did not exempt the transfer income tax pursuant to Articles 69 and 133 of the former Restriction of Special Taxation Act on the income accruing from the transfer of the instant land was unlawful.

B. Relevant statutes

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

C. Determination

(1) 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 cultivated directly and continuously, and the said land must be farmland as of the date of transfer.

(2) First, as to whether the instant land was used as farmland around the time of transfer on April 13, 2004, the following facts are difficult to believe in light of the following facts, and the testimony of Gap 3, 4, 5, and 9 (including each number), and witness uniforms and spawns are insufficient to acknowledge each of the statements in Gap 6 and 8, and there is no other evidence to prove otherwise.

Rather, if the purport of the entire argument is added to the statements in Eul evidence Nos. 2, 4, 5 (including each number), the plaintiff entered into a sales contract for the land of this case with Jin-young, Inc. around October 25, 2002 and completed permission for farmland conversion and approval for factory construction on or around December 2002 in order to convert the land of this case into land for factory site in accordance with the terms and conditions of the sales contract. However, the plaintiff cancelled the above sales contract on or around January 4, 2003, as the factory construction of the land of this case was approved on or around January 15, 2003, the plaintiff paid the farmland creation cost6,684,700 won on or around Apr. 15, 2003, the purchaser-building of this case's land of this case cannot be viewed as the manufacturing business after February 16, 2004, and the plaintiff's assertion that the above land of this case was registered as part of the manufacturing business after February 16, 2009.

(3) Therefore, the instant disposition, based on the premise that the instant land is not subject to capital gains tax exemption under the former Restriction of Special Taxation Act, is lawful.

3. Conclusion

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

official training laws and regulations;

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 the resident prescribed by the Presidential Decree, for not less than eight years [in case where the relevant land is incorporated into the Korea Agricultural and Rural Infrastructure Corporation established under the Korea Agricultural and Rural Infrastructure Corporation and Agricultural Infrastructure Corporation Act (hereafter in this Article, referred to as the “Korea Agricultural and Rural Infrastructure Corporation”) or into 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 in case where the farmland eligible for subsidies for managerial transfer direct payments prescribed by the Presidential Decree is transferred to the Korea Agricultural and Rural Infrastructure Corporation or agricultural corporations for not less than three years, not later than December 31, 2010] and 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 in case where the relevant land is incorporated into the residential area, commercial area and industrial area (hereafter in this Article, referred to as the “residential area, etc.”) under the National Land Utilization Act, limited to 00.

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

Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 18704 of Feb. 19, 2005), Article 66 (Reduction or Exemption of Transfer Income Tax on Self-Cultivating Farmland)

(1) For the purpose of the text of Article 69 (1) of the Act, the term “resident prescribed by the Presidential Decree residing in the seat of the farmland” means a person who has cultivated the farmland while living in the area falling under any of the following subparagraphs (including the area which falls under the relevant area at the time of commencement of cultivation, but comes not to fall under it due to a reorganization of administrative district) for not less than 8 years (5 years in the case of transfer 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), and 3 years in the case of transfer to the corporation under

1. An area within a Si/Gun/Gu (referring to an autonomous Gu; hereafter in this paragraph, the same shall apply) in which 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 has been cultivated by himself for not less than 8 years (in case of transfer to the Korea Agricultural and Rural Infrastructure Corporation or the corporation under paragraph (2), 5 years; and in case of transfer to the Korea Agricultural and Rural Infrastructure Corporation or the corporation under paragraph (2), 3 years) from the time of acquisition until the time of transfer, excluding that falling under any of the following subparagraphs. In this case, in calculating the period of farmland cultivated inherited, the period acquired and cultivated by the predecessor shall be deemed

1. Farmland located in the Special Metropolitan City, Metropolitan Cities (excluding Guns located in Metropolitan Cities), or Sis (excluding Eup/Myeon areas in a Si in the form of Do and agricultural complex, 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 areas as farmland located within a residential, commercial and industrial area under the National Land Planning and Utilization Act: Provided, That farmland incorporated within a large development project area (referring to a single project execution area with the same project approval approval) falling under any of the following items as a result of the implementation of a development project in a large development project area falling under any of the following items, and for which three years have passed from the date of incorporation into such area due

(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: 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 a sales contract where construction has been commenced, etc., and where the relevant farmland has been designated as land other than farmland before the date of a land substitution disposition and it has become impossible

(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 chief of the district 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

Enforcement Rule of the former Enforcement Rule of the Restriction of Special Taxation Act (amended by Ordinance of the Ministry of Strategy and Finance No. 421 of March 11, 2005)

Article 27 (Scope, etc. of Farmland)

(1) The farmland pursuant to the provisions of Article 66 (3) of the Decree shall be the land actually used for the cultivation regardless of the land category on the public cadastral book as the rice field and shall include the farming shacks, composts, composts, pumping stations, swamps, branches, roads, waterways, etc. which are directly required for the management of the farmland.

(2) The confirmation of whether the land falls under the land as prescribed in Article 66 (3) of the Decree shall be subject to the following standards:

1. It shall be the land whose transfer is confirmed to be 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); and

2. It shall be a certified copy of the resident registration card, a certified copy of the farmland ledger issued or issued by the head of Si/Gu/Eup/Myeon, and a self-certification of farmland by the transferor, who has resided in a 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, agricultural partnership under the Framework Act on Agriculture and Rural Community, and agricultural

Finally.