Board of Audit and Inspection 2012 depth0100 ( October 28, 2012)

It does not meet the requirements for reduction or exemption because it does not cultivate substitute land within one year from the date of transfer of previous farmland.

Inasmuch as a person is a person who has not cultivated substitute land within one year from the date of transfer of the previous farmland, it cannot be deemed that he/she satisfies the requirements for reduction or exemption of capital gains tax on substitute land, and the mere fact that he/she has concluded a contract for the selection of crops or the actual purchase of trees is insufficient to deem that there is a justifiable reason for not cultivating substitute land within one year.

2012Guhap4333 Disposition of revocation of imposition of capital gains tax, etc.

Maximum XX

Head of the North Mine District Tax Office

December 27, 2012

January 17, 2013

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of capital gains tax of KRW 000 against the Plaintiff on January 2, 2012 is revoked.

1. Details of the disposition;

A. The Plaintiff, on May 15, 2009, transferred the amount of 000 square meters in purchase to Ga on May 15, 2009, the amount of 200,000-2 return of 2,550 square meters in Eup/Myeon from May 18, 2009, the Plaintiff transferred the amount of 000 square meters in purchase price to Mao on August 18, 2009, the amount of 000-29 and 646 square meters in the same Ri to Mao on October 23, 2009 (hereinafter referred to as “the previous farmland”).

B. On February 27, 2010, the Plaintiff acquired a total of 2,657 square meters in total, including 488 square meters in the same Ri, 00 m2,657 m2,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000.

C. On May 31, 2010, the Plaintiff reported the transfer income tax on the transfer of the previous farmland of this case to the Defendant, and applied the reduction or exemption of transfer income tax by farmland substitute land pursuant to Article 70 of the Restriction of Special Taxation Act.

D. However, on January 2, 2012, the Defendant deemed that the Plaintiff failed to cultivate the instant substitute land within one year from the date of transfer of the previous farmland, and did not meet the requirements for reduction and exemption from farmland substitute land, and that the Defendant corrected and notified KRW 000 of the capital gains tax to the Plaintiff (hereinafter “instant disposition”).

E. On March 30, 2012, the Plaintiff filed a request for review with the Board of Audit and Inspection against the instant disposition, but was dismissed on July 3, 2012.

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, 5, Eul evidence 1 and 2 (including each number, hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the disposition is lawful;

A. Summary of the plaintiff's assertion

The cultivation within one year from the date of acquisition, which is the requirement for capital gains tax reduction or exemption under the farmland substitute land, shall not be deemed only formally, but also be judged practically. The substitute land in this case does not have a rice shed due to low productive relation, and there is a lot of time until it is selected after research, investigation, and selection of substitute crops. The reason is that va tree selected by the Plaintiff as substitute crops is growing down in drought and planting it between October and November. In light of the fact that the Plaintiff entered into a contract to purchase vain tree within one year from the date of acquisition of the substitute land in this case, it shall be deemed that the Plaintiff cultivated the substitute land within one year from the date of acquisition of the land in this case. Thus, the disposition in this case is unlawful.

B. Relevant statutes

Attached Form is as shown in the attached Form.

(c) Fact of recognition;

1) The instant substitute land was not used as an crops cultivation site prior to the Plaintiff’s acquisition, and at least until August 22, 2011, the instant substitute land was left neglected in a state of miscellaneous trees and miscellaneous trees.

2) The instant substitute land was publicly announced as marginal farmland as Act No. 2008-22 of May 21, 2008.

3) From 2009 to 2011, there is no receipt of subsidies for preserving rice income from the instant substitute land.

4) On September 2, 2011, the Plaintiff filed an application for the creation of a "development project for medicinal herbss production complex" with Sungsung-gun.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, and 7, the purport of the whole pleadings

D. Determination

According to Article 70(1) of the Restriction of Special Taxation Act (amended by Act No. 9921, Jan. 1, 2010; hereinafter the same) and Article 67(1) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 22037, Feb. 18, 2010); where a person who resided in the former location of farmland for at least three years and cultivated farmland while residing in the new location of farmland for at least three years within one year from the date of transfer due to necessity for cultivation, a tax amount equivalent to 100/100 of capital gains tax on income accruing from such substitute land shall be reduced. The purport of the provision is that a person who has resided in the new location of farmland for at least three years and has resided in the new location of farmland for at least three years, and thus, a person who has resided in the new location of farmland for at least three years shall be deemed to have resided within the previous period of 205 years from the date of transfer of farmland (see, e.g., Supreme Court Decision 2009Do293).

In addition, the principle of strict interpretation derived from the principle of no taxation without law is applicable not only to cases falling under the taxation requirements, but also to cases falling under the requirements for non-taxation and tax reduction and exemption. As such, the expanded interpretation or analogical interpretation of the requirements for non-taxation or tax exemption and exemption as favorable to the taxpayers without any justifiable reason leads to a result contrary to the principle of fair taxation, which is the basic ideology of the tax law, and thus, it shall not be allowed (see Supreme Court Decision 2005Da19163, May

As to the instant case, insofar as the Plaintiff was a person who did not cultivate the instant substitute land even after one year from the date of transfer of the previous farmland, it cannot be deemed that the Plaintiff satisfied the requirements for reduction and exemption of capital gains tax for farmland substitute land. Furthermore, the circumstance alleged by the Plaintiff alone cannot be deemed as an objective and justifiable ground for the Plaintiff’s failure to cultivate the instant substitute land within one year. Therefore, the instant disposition that excluded the application of the provisions on reduction and exemption of capital gains tax for the instant previous farmland under the Restriction of Special Taxation Act is lawful, and the Plaintiff’s assertion contrary thereto is without merit.

3. Conclusion

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