Cho Jae-2015-Mining-4588 ( December 08, 2015)

There is no objective evidence that it has been deemed that there has been self-defense for not less than eight years.

As an individual or corporation is registered as an individual or corporation during the period of possession of the farmland in this case and obtains a considerable amount of revenue, while it did not present any evidence about the purchase contents, such as the type of crops cultivated or seeds and seedlings, it shall not be deemed that the farmland in this case has been

Article 69 of the Restriction of Special Taxation Act (Reduction or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

Gwangju District Court-2016-Gu Partnership-10510 ( December 22, 2016)

In depth 00

00. Head of tax office

2016.08.18

2016.22

1. The plaintiff's claim is dismissed.

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

The disposition of imposition of capital gains tax of KRW 168,737,970 against the plaintiff on January 12, 2015 by the former defendant of the Gu office shall be revoked.

1. Details of the disposition;

A. On May 20, 1998, the Plaintiff completed the registration of ownership transfer on the ground of each gift with respect to the land of 1,572 square meters prior to 00 Do-nam 00,000,000, and 60 square meters prior to 523 Do-ri on November 14, 2005 (hereinafter collectively referred to as “the farmland of this case”).

B. On November 18, 2013, the Plaintiff filed an application for reduction or exemption of capital gains tax under Article 69 of the former Restriction of Special Taxation Act (amended by Act No. 13560, Dec. 15, 2015; hereinafter “former Restriction of Special Taxation Act”) on the ground that the Plaintiff’s transfer of the farmland in this case to the Defendant for “absent farmland for at least eight years.”

C. Accordingly, on January 12, 2015, the Defendant denied the tax amount reduced or exempted by deeming the instant farmland cultivated by a third party, other than the Plaintiff, as having been cultivated by a third party. On January 12, 2015, the Defendant issued a correction and notice of KRW 169,737,970 for the transfer income tax reverted to the Plaintiff (hereinafter “instant disposition”).

D. The Plaintiff appealed and filed an appeal with the Tax Tribunal on August 26, 2015, but the Tax Tribunal dismissed the Plaintiff’s claim on December 8, 2015.

2. Whether the disposition is lawful or not

A. The plaintiff's assertion

Since the Plaintiff directly cultivated the farmland of this case for not less than eight years, the disposition of this case is unlawful.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) Article 69(1) of the former Restriction of Special Taxation Act provides that the tax amount equivalent to 100/100 of capital gains tax shall be reduced or exempted for income accruing from the transfer of land prescribed by Presidential Decree among land directly cultivated by a resident prescribed by Presidential Decree who resides in the seat of farmland for at least eight years, and Article 66(13) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 25211, Feb. 21, 2014; hereinafter referred to as the "former Enforcement Decree of the Restriction of Special Taxation Act") provides that "direct cultivation" means that a resident cultivates or cultivates at least 1/2 of his/her own labor force for the cultivation of crops or perennial plants in his/her own farmland.

The legislative intent of the above provision on reduction and exemption is to reduce the tax burden following the transfer of farmland as part of the land farming policy, and the meaning of the "regular work" and "one-half or more own labor force" should be interpreted in accordance with the language and text (see Supreme Court Decision 2010Du8423, Sept. 30, 2010). Thus, as long as a direct farming is engaged in concurrently another occupation, even if the direct farming is engaged in concurrently another occupation, it does not constitute a self-defense. However, it cannot be deemed that it is only indirectly engaged in another occupation (see Supreme Court Decision 2002Du8444, Oct. 11, 2002). A person partially engaged in such reasons as not engaging in agriculture but having other occupation, etc. shall be deemed directly cultivated only when the labor force ratio of "self-help" is more than 1/2.

Meanwhile, in light of the above legal principles, the burden of proof as to the requirements for exemption from capital gains tax is insufficient to recognize that the Plaintiff, a taxpayer for exemption from capital gains tax (see, e.g., Supreme Court Decision 2002Du7074, Nov. 22, 2002) was engaged in the cultivation of the crops of this case or cultivated at least 1/2 of the crops of this case with the Plaintiff’s labor force for not less than eight years, in full view of the following circumstances where evidence submitted by the Plaintiff and evidence submitted by the Plaintiff, together with the overall purport of pleading Nos. 4-2, 5, 7, 10, 10, and 11, as well as evidence Nos. 5-1 through 15, 2-2, 3-2, and 4-2, 4-2, 4-2, 5, 7, 10, and 00 of witness evidence submitted by the Plaintiff. Therefore, the disposition of this case is legitimate.

A) The Plaintiff asserts that there is no data on the yield of agricultural chemicals or crops because he cultivated and cultivated eco-friendly crops, etc. for eating by dividing them into his family and land in 380 among the instant farmland, but even according to this, there is no data on the purchase details of agricultural crops or seedlings cultivated from the instant farmland for 8 years. However, the Plaintiff did not present any evidence even though there is no data on the purchase details, such as the kind of crops or seedlings cultivated from the instant farmland.

B) Also, considering the following: (a) The farmland ledger is not prepared and kept for farmland management in real time, and it is not usable as data to verify whether a person eligible for tax reduction and exemption is adequate; (b) even in the specification of transactions between the Plaintiff and 000, pesticides purchase amounting to KRW 159,00 in total three times from 2011 to 2013; and (c) the Plaintiff’s residence (aa Si) and the farmland of this case (00) are located in PP group, and is located in a long distance from the Plaintiff’s residence (a Si) and the farmland of this case (00), it is difficult to deem that the Plaintiff has voluntarily improved the farmland of this case for at least eight years solely on the basis of the farmland ledger or the specification between the Plaintiff and the Plaintiff

C) During the holding period of the farmland in this case, the Plaintiff: (a) registered an individual or legal entity with the trade name, “00 communications, 00, 00, 00, B0 (Haak), BB (Haak), 00, 00, cb (Haak), c (Sang), d golf Annb, ee golf Annb, e-e golf Annbnx; and (b) acquired an aggregate of KRW 631,687,738, and 71,400,000 in total as business income for the same period; and (b) acquired a considerable distance from the farmland in this case due to the location of each of the above businesses, a Si,00, b, c, c, d, etc., and each of the labor incomes in 2012 and 2013, it is difficult to view that the Plaintiff directly acquired the farmland in this case, in light of the fact that the Plaintiff directly acquired the farmland in this case.

However, there is no evidence to acknowledge that there was no need for direct management of each of the above businesses since the Plaintiff made an investment in shares or had a field manager. However, it is insufficient to recognize that there was a 00 person employed in the name of the Plaintiff and acquired wage and salary income.

D) The Plaintiff: (a) around 2005, planted spawn and tin trees on the farmland of this case; (b) however, around 2005, the Plaintiff’s purchase of seedlings cannot be confirmed; and (c) according to the Round photograph following the Round around May 2010, it is only possible to verify the poradern seedlings in the farmland of this case; and (d) it cannot be deemed as the fluent tree around 2005.

E) Witness 00 testified to the effect that “the Plaintiff had cultivated part of the farmland of this case by himself and Kim 00 with the Plaintiff’s permission, and that “the Plaintiff was shot in the farmland of this case.” However, the Plaintiff was unable to make concrete statements about the crops, cultivation methods, period, etc. cultivated by the Plaintiff, and ② Kima (Seoul 00-gun 00-No 166) residing in the vicinity of the farmland of this case, and around 2010, is known to the effect that the Plaintiff was shot in the farmland of this case before planting the trees of this case, and that the Plaintiff did not know whether the Plaintiff was the Plaintiff or not.” In light of the fact that the witness’s testimony was prepared to the effect that: (a) the Plaintiff was unable to make specific statements about the crops, cultivation methods, period, etc. cultivated by the Plaintiff; and (b) the witness’s testimony is difficult to believe the above 00-year Maa (Seoul 00-No 00-No 16) residing in the farmland of this case.

F) Although Park 00 and Kim 00 prepared a second written confirmation to the effect that "the plaintiff cultivated part of the farmland of this case at the plaintiff's request or cultivated the farmland of this case directly by the plaintiff, and that "the letter of confirmation prepared by the tax official was written erroneously." However, at the time of the tax investigation, they directly stated that they cultivated the farmland of this case, and the contents thereof are specific, the second written confirmation of Park 00 and Kim 00 cannot be deemed that the plaintiff directly cultivated the farmland of this case.

3. Conclusion

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