Early High Court Decision 2008Gu0956 (Law No. 24, 2008)

Farmland not actually cultivated as of the date of transfer shall not be deemed farmland as of the date of transfer, which is not a state of suspension of land.

The land shall be confirmed as of the date of transfer, and even if the public record is farmland, the land which is not actually cultivated as of the date of transfer shall not be deemed farmland as of the date of transfer unless it is in a state of temporary closure, whether it is by the landowner’s own or by another person, or temporarily.

The contents of the decision shall be the same as attached.

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The Defendant’s disposition of imposition of KRW 100,000,000 on January 3, 2008 against the Plaintiff was revoked.

1. Circumstances of the disposition;

A. On May 30, 2007, the Plaintiff acquired on May 20, 1981, transferred the instant land to Nonparty ○○○○○○○○○, ○○○○○, 281-2, 735 square meters (hereinafter “instant land”) on May 30, 200, and on July 30, 2007, applied for reduction of capital gains tax of 100,000,000 won to the Defendant on July 30, 2007, while the instant land constitutes one-year or more, which is subject to reduction of capital gains tax under Article 69(1) of the Restriction of Special Taxation Act.

B. On October 2007, the Defendant denied the reduction or exemption of capital gains tax on the ground that the instant land does not fall under farmland as of the date of transfer, and imposed capital gains tax of 100,000,000,000 to the Plaintiff on January 3, 2008 through prior notice of taxation and pre-assessment review (hereinafter “instant disposition”).

C. The Plaintiff appealed and filed an appeal with the Tax Tribunal on March 25, 2008, but the claim was dismissed on June 24, 2008.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, 7, 8, Eul evidence Nos. 1 through 6 (including branch numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the dispositions of the instant case are legal.

A. The plaintiff's principal

The land of this case is a self-owned land for not less than eight years and used for another person temporarily as of the date of transfer of farmland more than the farmland source under the farmland ledger, and even if the plaintiff did not cultivate, it is possible to use it as farmland at any time. Thus, it shall be deemed land subject to reduction and exemption under Article 69(1) of the Restriction of Special Taxation Act. It is unlawful against the principle of no taxation without law to add unclear requirements that it should be

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

(1) The instant land is located in the area where the Gyeongbuk-gun & Myeon Office is located, and is located in the fourth line across Daegu-do boundary, and all the land adjoining to the instant land is formed into restaurants and residential areas.

(2) On May 20, 1981, the Plaintiff directly cultivated the instant land and suspended it, leased it to Nonparty ○, and Nonparty 1 operated the typ repair shop on the instant land from December 22, 1998 to July 1, 2002. From July 7, 2002 to January 25, 2007, Nonparty ○○-gu operated the typ repair shop from the instant land.

(3) According to the airline margin dated November 16, 1997 as to the land of this case, the surface of the land of this case was equally arranged and cultivated. According to the airline margin dated October 4, 1998, it seems that the floor of the land of this case was packed with concrete and presumed to be the panel structure. According to the airline margin dated November 10, 2001, the floor of this case was a container structure on the land of this case, and the floor was presumed to be vehicles or other fishing as concrete packaging, according to the airline margin dated November 4, 2007, there was no container on the land of this case, but the floor still remains a concrete package.

[Reasons for Recognition] The aforementioned evidence, Gap evidence Nos. 3, 4, 5, Eul evidence Nos. 7 and 8, video products, inquiry results on the Gyeongbuk-do Governor of this Court, the purport of the whole pleadings

D. Determination

(1) In full view of the provisions of Article 69(1) of the Restriction of Special Taxation Act, Article 66(4) and (5) of the Enforcement Decree of the same Act, and Article 27(2) of the Enforcement Rule of the same Act, in order for a transferor to be subject to reduction or exemption of capital gains tax on self-employed farmland, the transferor shall have cultivated himself/herself while residing in the location of farmland for not less than eight years and have been verified as of the date of transfer. Even if land on the public register is farmland, land which is not actually cultivated as of the date of transfer shall not be deemed farmland as of the date of transfer, unless it is directly used as farmland by the landowner or temporarily in a state of temporary absence, regardless of whether it is by another person or by another person (see Supreme Court Decision 91Nu7422, Nov. 12, 1991).

(2) According to the facts of recognition as to the instant case, the Plaintiff, the owner of the instant land, directly cultivated the instant land for not less than 8 years. However, since the instant land was not used as farmland from around 1997, prior to 10 years prior to its transfer to the Plaintiff, and was used as a place of business by leasing it to another person, and there is no evidence to deem that it was temporarily in a state of temporary closure at the time of its transfer, the instant land cannot be deemed farmland as of the date of transfer, and the instant disposition on this ground is lawful.

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.