Appropriateness of the assertion that the requirements for farmland substitute are satisfied as it constitutes a self-decent farmland for not less than three years;

It is difficult to view that a person has cultivated directly while residing in the location of land, and it is used for any purpose other than farmland for a considerable period of time, and thus, it is not possible to grant benefits such as reduction or exemption of capital gains tax due to farmland.

Article 70 (Abatement or Exemption of Transfer Income Tax on Substitute Land for Farmland)

Article 67 (Requirements, etc. for Reduction or Exemption of Transfer Income Tax on Substitute Land for Farmland)

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 94,107,087, which the Defendant rendered to the Plaintiff on January 2, 2007, shall be revoked.

1. Details of the disposition;

A. On March 31, 2006, the Plaintiff completed the registration of ownership transfer on the ground of sale on March 30, 2006 with respect to ○○○○○○-dong ○○○○○○○○○○○, ○1,410 square meters (hereinafter “the instant land”). On May 10, 2006, the Plaintiff sold the instant land to ○○○○ on May 10, 2006.

B. On May 26, 2006, the Plaintiff acquired the land No. 1 as a substitute land for farmland, and thus, pursuant to Article 70 of the Restriction of Special Taxation Act, filed a tax base return with the Defendant by deducting the total amount of KRW 94,107,087 from the calculated capital gains tax reduced or exempted in full.

C. On January 2, 2007, the Defendant imposed and notified the Plaintiff of KRW 94,107,087 of the transfer income tax for the year 2006, on the ground that the Plaintiff did not meet the requirements for reduction or exemption of the transfer income tax due to farmland since it was not recognized that the Plaintiff did not own the land of this case as a result of the tax investigation (hereinafter “instant disposition”).

D. On March 27, 2007, the Plaintiff appealed against the director of the Central Tax Office of the Central Tax Tribunal, but was dismissed on May 30, 2007. On August 31, 2007, the Director of the National Tax Tribunal requested the adjudgment from the Director of the Central Tax Tribunal, but on December 11, 2007, the Plaintiff filed the instant lawsuit on March 7, 2008 upon receiving a decision of dismissal on December 11, 2007.

[Reasons for Recognition] The facts without dispute, Gap 1, 2, 3, Eul 4, 11, 12, and 13, and the purport of the whole pleadings

2. The assertion and judgment

A. The plaintiff's assertion

The Defendant, even though residing in the location of the instant land No. 2 and cultivated sweak mushrooms directly from the instant land for three years or more, and was growing sweak, pota, bean, etc. around May 30, 2006, selling the said land to sweak sweet, etc., so it is unlawful for the Defendant to take the instant disposition even though he meets the requirements for reduction and exemption of capital gains

(b) Related statutes;

Article 70 (Abatement or Exemption of Transfer Income Tax on Substitute Land for Farmland)

Article 67 (Requirements, etc. for Reduction or Exemption of Transfer Income Tax on Substitute Land for Farmland)

C. Determination

1) Non-taxation on capital gains tax due to substitute farmland under Article 70(1) of the Restriction of Special Taxation Act and Article 67(3)2 of the Enforcement Decree of the same Act shall have resided in the previous farmland for not less than three years and cultivated directly directly (the resident is engaged in cultivating crops or growing perennial plants on his own farmland at all times or by cultivating or cultivating one half or more of farming works with his own labor). ② The previous land shall be the land which is subject to agricultural income tax, and the new land shall be the farmland. ③ The new farmland shall be transferred within one year after its acquisition. ④ The area of the newly acquired farmland shall be not less than half of the transfer farmland area, or the value thereof shall be not less than one third of the transfer farmland value, ⑤ The self-employed farmer shall acquire as necessary for farming, and ⑤ The new farmland shall be cultivated while residing in the location of the farmland for three years after its acquisition.

2) From 1993 to 1997, we examine whether the Plaintiff directly cultivated quantant mushrooms from the land No. 2 of this case.

The facts of self-sufficiency in farmland are proved by the claimant (see Supreme Court Decision 92Nu11893, Jul. 13, 1993). Gap evidence No. 8 is merely the first document prepared ( April 26, 2006) immediately before the plaintiff disposed of the above land, and Gap's statements in Gap 10 (the certificate of fact), 11 (the certificate of fact), and 12 evidence (the certificate of fact) are stated. The plaintiff has operated an agrochemical retail store in the name of "○○○○○, Dong-dong, ○○○○, ○○○, ○○, ○○, ○○, 193, etc. from April 16, 1982 to April 16, 1982, and there is no other evidence to prove otherwise.

3) Even if it is acknowledged, as alleged by the Plaintiff, that cultivated a sweak in the second land from 1993 to 197, we examine whether the provision on capital gains tax reduction due to the substitute land can be applied in the instant case for the following reasons.

The purport of the provision that imposes capital gains tax on the substitute land of farmland is to protect farmers through the free permission and guarantee of substitution of farmland, or to promote the development and encouragement of agriculture. Therefore, the acquisition and sale of farmland by self-employed farmers should be limited to cases where the farmland owned by the self-employed farmer is to be substituted for the purpose of farming for a considerable period of time (see, e.g., Supreme Court Decision 95Nu3695, Sept. 295). Therefore, the benefit of capital gains tax reduction due to substitute land cannot be granted to cases where the land is used for any purpose other than farmland for a considerable period of time and is actually lost its function as farmland.

Even according to the Plaintiff’s assertion, since around 197, land No. 2 was used for a mid-term (construction machinery) garage, high water storage yard, etc. continuously from the time of sale until March 2006, the lease contract with ○○ Heavy Period was terminated and used for real cultivation. Since land No. 1 had already been acquired as large land around March 2006, the Plaintiff seems to have been disposing of land No. 2 at the time. Thus, considering the fact that it is difficult for the Plaintiff to newly start the farming of land to be disposed of in the near future, it is doubtful that the Plaintiff did not start farming from the above land for the purpose of applying the capital gains tax exemption provision for farmland substitute land. Moreover, it is reasonable to view that the land of this case was acquired as large-term land for the purpose of sale after 197, as the land of this case was actually acquired as large-term land for the purpose of sale.

Therefore, the plaintiff's assertion that capital gains tax reduction regulations should apply to this case's farmland substitute land is without merit.

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.