Cho High Court Decision 2010Du3822 ( December 30, 2010)

It is difficult to recognize that a person has resided in the area of substitute farmland.

However, in case of on-site verification, it is difficult to recognize that a person was residing in a substitute farmland location in light of the fact that according to the lessor’s statement, he/she did not permanently reside in a room for the purpose of using it, and that most credit cards were used in another city in which he/she actually used it as a place of residence.

2011Guhap5101 Revocation of Disposition, etc. of Imposition of Capital Gains Tax

Park XX

port of origin

October 19, 2011

December 28, 2011

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 KRW 64,255,790 on September 9, 2010 against the Plaintiff and KRW 6,425,570 on the local income tax belonging to the year 2007 (the “2010 stated in the complaint” appears to be erroneous) shall be revoked.

1. Details of the disposition;

A. On February 2, 2004, the Plaintiff purchased 330.5/4,299 shares (hereinafter “the previous farmland of this case”) from among 000 m29 m2, Seocho-gu, Seoul, Seocho-gu, Seoul, 000, and completed the transfer of ownership on March 23, 2004.

B. On March 24, 2007, the Plaintiff transferred the previous farmland to OO on the ground of a consultation on the land for public use, and completed the registration of ownership transfer on March 26, 2007, and reported and paid KRW 51.69.180 upon the transfer of the previous farmland on May 29, 2007.

C. On November 14, 2007, the Plaintiff acquired a share of 398/3,180 square meters (hereinafter “the substitute farmland of this case”) among 3,180 square meters of OOri 00,000 square meters in total, and completed the registration of ownership transfer in the name of the Plaintiff on December 18, 200.

D. On January 9, 2008, the Plaintiff considered that the acquisition of the substitute farmland in this case satisfies the requirements for reduction and exemption of capital gains tax as substitute farmland for farmland, and applied for reduction and exemption of capital gains tax of KRW 51,669,180 for the previous farmland in this case, and received a full refund of capital gains tax on April 30, 2008.

E. On September 9, 2010, the Defendant corrected and notified the Plaintiff of KRW 64,25,790, and KRW 6,425,570 of the local income tax reverted to year 2007 on the ground that the Plaintiff did not reside in the land of the instant substitute farmland according to the result of the on-site verification conducted by the director of the Seocho Tax Office on the instant substitute farmland (hereinafter “instant disposition”).

F. The Plaintiff dissatisfied with the instant disposition and filed a request for review with the Tax Tribunal on November 9, 2010, but was dismissed on December 30, 2010.

[Ground of recognition] Facts without dispute, Gap evidence 1 and 3 Eul evidence 1 to 6 (including branch numbers), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff acquired the previous farmland of this case and resided in the location of the previous farmland for not less than three years, and acquired the substitute farmland of this case within one year from the date of transfer of the previous farmland of this case, and leased on September 1, 2008, one room of the second floor of AAAAri 00-0 ground buildings (hereinafter referred to as "AAri building of this case") on Sep. 5, 2008, and resided in the moving-in report on Sept. 5, 2008, and on May 20, 2010, the plaintiff moved in the land of this case to the land of this case for not less than three years, and the land of this case is subject to the cancellation of the moving-in report on May 20, 200, 200 Da 2000 Do 0000 Dadong 2000 (hereinafter referred to as "Bdong apartment of this case"). Thus, the income of the previous farmland of this case should be subject to the cancellation of the transfer of the farmland of this case.

(b) Related statutes;

Attached Form is as shown in the attached Form.

C. Issues and determination

(1) Requirements for reduction or exemption of capital gains tax due to substitute land for self-arable farmland

Article 70(1) of the Restriction of Special Taxation Act (amended by Act No. 10406, Dec. 27, 2010) and Article 67(1), (2), and (3)1 of the Enforcement Decree of the Restriction of Special Taxation Act provide that where a person who has directly cultivated farmland while residing in the location of previous farmland for not less than three years, acquires another farmland within one year (two years in cases of expropriation by consultation or expropriation under the Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor and by consultation or by expropriation under other Acts) from the date of transfer of previous farmland, and cultivates another farmland for not less than three years (two years in cases of expropriation by consultation or by expropriation under the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor) and the area of new farmland is not less than half of the area of farmland to be acquired or a third of the value of transferred farmland, the tax amount equivalent to 100/100

However, in relation to the requirements of the above 2 and 3, it is reasonable to view that the person residing in the location of the newly acquired farmland for at least three years should begin with his/her residence and self-defense within one year from the date of transfer of the previous farmland, unless there are special circumstances (see, e.g., Supreme Court Decision 2002Du5924, Sept. 5, 2003). In a case where the land for public use was transferred due to an agreement acquisition as in the previous farmland of this case, he/she shall start residing and self-defense within two years from the date of transfer of the previous farmland of this case (the plaintiff started residing from September 208, which is within two years from the date of transfer of the previous farmland of this case).

(2) The issues of the instant case

The issue of this case is whether the Plaintiff resided at the seat of the substitute farmland in this case with respect to the requirements of reduction of capital gains tax due to substitute farmland as seen earlier.

(3) Determination

In light of the following circumstances, i.e., at the time of 209 and around October 2010, 200, PE, the owner of the above building, stated that the Plaintiff did not lease the above part of the building at the time of 200, and that the Plaintiff’s family members, including the Plaintiff’s family members, were 4,00,000, and 2,000,000,000,000,000 were 1,000,000,000,000,000,000,000,000,000,000 were 1,00,000,000,000,000,000,000,000,000,000,000,000,000,000,00,000,00,00,00,00.

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.