Whether capital gains accruing from the transfer of self-employed farmland for not less than eight years is subject to non-taxation of capital gains tax notwithstanding the date of ownership on such register (affirmative)

Article 5 subparagraph 6 (d) of the former Income Tax Act (amended by Act No. 4019 of Dec. 26, 1988) which provides that income generated from the transfer of farmland shall be exempt from taxation, and Article 14 (3) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 12564 of Dec. 31, 198) provides that "the purpose of the provision is to reduce the tax burden due to the transfer of farmland as part of the land farming policy and to make the owner by reducing the tax burden due to the transfer of farmland." Article 5 (2) of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Finance and Economy No. 1781 of Mar. 6, 1989) is merely an example of a document proving the above fact. Thus, capital gains tax and the defense tax thereon shall not be imposed on capital gains generated from the transfer of farmland, which has not been less than eight years ago, notwithstanding the date of ownership on the register.

Article 5 subparagraph 6 (d) of the former Income Tax Act (amended by Act No. 4019 of Dec. 26, 198), Article 14 (3) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 12564 of Dec. 31, 1988), Article 5 (2) of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Finance and Economy of Mar. 6, 1989)

Supreme Court Decision 84Nu423 decided Feb. 13, 1985 (Gong1985,440) 86Nu526 decided Oct. 14, 1986 (Gong1986,3057) 87Nu325 decided Jul. 7, 1987 (Gong1987,1348) 87Nu777 decided Nov. 10, 1987 (Gong1988,117)

Lee Young-chul et al., Counsel for the defendant-appellant

Head of Jeju Tax Office

Gwangju High Court Decision 89Gu960 delivered on May 1, 1990

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

Article 5 subparagraph 6 (d) of the former Income Tax Act (amended by Presidential Decree No. 4019 of Dec. 26, 1988) applicable to this case and Article 14 (3) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 12564 of Dec. 31, 1988) provide that income derived from the transfer of farmland as of the date of the transfer of land which has been cultivated by themselves for not less than eight years and which is subject to taxation of farmland tax shall be non-taxation. The purport of the above provision is to reduce the tax burden due to the transfer of farmland as part of the land policies, and Article 5 (2) of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Finance and Economy No. 1781 of Mar. 6, 1989) is merely a document that can prove the above fact, and thus, it cannot be said that capital gains tax has been imposed for not less than 86Nu52678 of Oct. 14, 1986; see Supreme Court Decision 87Nu1887.7.7.

According to the reasoning of the judgment below, the court below found, based on the evidence adopted by the court below, that the plaintiff cultivated the land of this case after being donated from his father in spring in 1975, and sold it to the non-party non-party non-party non-party non-party loans in the name of the plaintiff around November 1, 1987 and transferred the registration of ownership transfer on March 2, 198. According to the above facts, the plaintiff did not impose capital gains tax and defense tax on the income accrued from the transfer of the above farmland for not less than eight years from spring in 1975 to March 2, 198. In comparison with the records, the court below's findings of fact and judgment are acceptable, and there is no error of law by misapprehending legal principles, such as theory of litigation.

Therefore, the appeal is dismissed and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Song Man-man (Presiding Justice)