Early High Court Decision 2010Du0738 ( October 25, 2011)

forest trees on the ground shall be deemed to have been transferred as part of land composition.

Considering the fact that the transfer of forest land does not distinguish the transfer value of forest trees and forest land, the buyer has agreed to the purchase price, the buyer has submitted a certificate that only the land was calculated, and there is no registered business registration regarding forestry, etc., the forest trees are deemed to have been transferred as part of the land, and the disposition that deemed to be subject to the transfer income tax on all forest land is legitimate.

2011Guhap1489 Revocation of Disposition of Imposing capital gains tax

XX

Head of the District Tax Office

November 25, 2011

December 23, 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 capital gains tax of KRW 9,315,570 against the Plaintiff on August 5, 2009 is revoked.

1. Details of the disposition;

A. On December 18, 199, the Plaintiff acquired 00-0 m2 (hereinafter referred to as “the instant forest”) of Dobong-gu, Seoyang-gu, Chungcheongnam-do (hereinafter referred to as the “Yancheon-gu”). On August 5, 2008, the Plaintiff transferred 275,000,000 won of the instant forest land to 4 persons, including HaB, etc. on August 5, 2008 (ownership of 1/2 shares).

B. On October 23, 2008, the Plaintiff: (a) deemed the income from the transfer of forest land among the income from the transfer of forest land in this case to the Defendant as capital gains; and (b) deemed the income from the transfer of forest trees as the capital gains tax; and (c) deemed the income from the transfer of forest trees as the business income, and accordingly reported and paid KRW 832,300 as global

C. On August 11, 2009, the Defendant issued the instant disposition to correct and notify the Plaintiff of the transfer income tax for the year 2008 in KRW 9,315,570 by deeming that the transfer of forest trees on the ground of the instant forest does not constitute business income as temporary transactions without business feasibility, and the said forest trees were included in the instant forest land and transferred.

D. The Plaintiff filed an objection with the Tax Tribunal on February 26, 2010, seeking the revocation of the instant disposition, but was dismissed on April 25, 2011.

[Reasons for Recognition] A without dispute, Gap evidence Nos. 2 through 5 (including each defense in the case with a different number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Since the Plaintiff had been planting trees before acquiring the forest land in this case, the Plaintiff continued to conduct the afforestation and growing of the forest trees, such as conducting the separate work and continuing forest conservation activities, etc. Even after acquiring the forest land in this case, the Korea Standard Industrial Classification, which is invoked as to the scope of the project in Article 29 of the Enforcement Decree of the Income Tax Act, stipulates the tree planting, cultivating, protecting, and protecting the forest in order to produce the forest trees among the afforestation businesses included in the forestry, and the determination of feasibility based on the forest growing activities, is consistent with the interpretation of the relevant provisions, such as Article 19(1) of the Income Tax Act, and the determination of feasibility is consistent with the interpretation of the relevant provisions, such as Article 19(1) of the Income Tax Act (where the Plaintiff imposes tax on the forest trees based on the continuity and repetition of the transfer of the forest trees, it is impossible to impose income tax on only one occasion after growing or transferring the forest trees for a long time, and thus, it is unlawful to determine whether the forest land in this case’s business income is subject to taxation or not.

B. Relevant statutes

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

C. Determination

(1) Article 94(1)1 of the Income Tax Act (amended by Act No. 9270, Dec. 26, 2008; hereinafter the same) provides that income accruing from the transfer of land or a building shall be capital gains; Article 19(1)1 of the Income Tax Act provides that income accruing from agriculture and a forestry shall be business income; and Article 51(8) of the Enforcement Decree of the Income Tax Act provides for the method of calculating the total amount of income in calculating the business income resulting from the operation of a forestry. Therefore, for separate taxation pursuant to Article 51(8) of the Enforcement Decree of the Income Tax Act, the transfer of forest trees shall be deemed a forestry, namely, business; if not, the income from the transfer of forest trees shall also be deemed included in the income from the transfer of land, and Article 94(1)1 of the Income Tax Act shall apply.

(2) In full view of the purport of the entire pleadings as stated in Gap evidence Nos. 2, Eul evidence Nos. 3 and Eul evidence Nos. 5, the plaintiff, when transferring the forest of this case, entered obstacles such as forest trees into a total purchase price without distinguishing the transfer value of forest trees from the transfer value of forest land. The confirmation document prepared by four (4) parties, such as BB, etc., submitted by the defendant, was not the purpose of land sale, so the part of the forest was not the first discussion itself and the disposal of the forest can be caused by harsh problems on the land use. Accordingly, the contract was concluded by calculating only the land price, and it is confirmed that the forest is included incidental to the tree. Accordingly, the statement on forest trees (related rights, etc.) prepared by the broker at the time of the forest of this case is not entirely stated, and it is not reasonable to recognize the transfer of the forest of this case as part of the forest of this case as the transfer income tax on the forest of this case, and the transfer of the forest of this case's forest of this case's title.

3. Conclusion

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