early 2007west3754 ( December 17, 2007)

Whether use is limited non-business land

In accordance with the measures taken by the head of a local government, restrictions on the construction of buildings, etc. on land in accordance with the measures of the head of a local government, but no restrictions are imposed on farmland cultivation.

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

1. The plaintiff's claims are all dismissed.

2. The plaintiffs shall bear the litigation costs.

The Defendant’s rejection of the reduction or correction of the amount of KRW 269,636,856 against Plaintiff AA on July 5, 2007, KRW 453,350,604 against Plaintiff CB, and KRW 57,728,650 against Plaintiff CCC shall be revoked.

1. Circumstances of the disposition;

A. On June 14, 1999, the Plaintiffs owned each of the following lands (hereinafter “each of the instant lands”) by donation from Nonparty D, the father of which was Nonparty D, and transferred them as follows:

(1) Plaintiff AA

O 26,021,00 won on November 29, 2006, the transfer value of 126,021,000 won on November 29, 2006

O The same 592m2 m2: Transfer on November 29, 2006, transfer price of 6,800,000 won

(O) 715 square meters per 799 square meters per Dong: Transfer and transfer on December 27, 2006 1,426,000,000 won

(2) Plaintiff CB

(O) 1,845 square meters per Dong-dong 989-3 : Transfer on December 22, 2006, transfer value of 2,604,000,000 O as of December 22, 2006, 144 square meters per Dong-4 144 square meters: Transfer on October 19, 2006, transfer and transfer value of 243,936,000 won

(3) Plaintiff CCC

(O) 2,966,225,00 won for the transfer, transfer on December 8, 2006, and transfer value on December 8, 2006

B. On January 31, 2007, the Plaintiffs deemed that each of the instant lands constitutes land for non-business use, and the acquisition value is based on the actual transaction value at both levels, and the standard market price as of August 30, 1990 at the time when Doddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddd

C. On May 22, 2007, the Plaintiffs asserted that both the transfer value and acquisition value should be the standard market price on the grounds that each of the instant lands does not constitute non-business land, and filed a claim for adjustment of the transfer income tax.

D. On July 5, 2007, the Defendant rejected correction on the ground that the Plaintiffs’ respective lands of this case constitute non-business land. After that, the Defendant, according to the decision of the National Tax Tribunal, determined the acquisition value as the standard market price as of June 14, 1999 that the Plaintiff donated by the National Tax Tribunal, reduced the transfer income tax of the Plaintiff’s A to KRW 295,31,245, and the transfer income tax of KRW 484,512,010, and the Plaintiff’s CC to KRW 601,772,409, respectively. The Defendant applied the appraisal value as of June 14, 1999, the acquisition value of each of the instant lands of this case as of KRW 269,636,856, the Plaintiff’s non-business land was reduced to KRW 453,50,670,757, and each of the instant dispositions against the Plaintiff’s CC to be reduced to KRW 750,7575,75757, respectively.

[Ground of recognition] Facts without dispute, Gap 1, 2 evidence, Eul 1 through 4, 9, 11, and 13 evidence (including paper numbers), the market price appraisal result of appraiser KimE, the purport of the whole pleadings

2. Whether the disposition is proper; and

A. The plaintiffs' principal

After the plaintiffs acquired each of the lands of this case on June 20, 2003, each of the lands of this case was designated as △△ District Unit Planning Zone No. 1, and the use of each of the lands of this case was restricted until the time of transfer. Thus, each of the lands of this case does not constitute the transfer price of the land of this case for the following reasons: Article 104-3 (2) of the former Income Tax Act (amended by Act No. 8825 of Dec. 31, 2007; hereinafter referred to as the "Act"); Article 168-14 (1) 1 and 3 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 20618 of Feb. 22, 2008; hereinafter referred to as the "Enforcement Decree of the Income Tax Act") and Article 83-5 (1) 12 of the former Enforcement Rule of the Income Tax Act (amended by Ordinance of the Ministry of Strategy and Finance of April 29, 2008).

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Whether it falls under land for non-business use under Article 104-3 (1) of the Act

(A) According to Article 104-3(1)1 (a) of the Act and Article 168-6(1) of the Enforcement Decree of the Act, where the period for owning the land is five years or more, the period corresponding to the farmland which the owner does not reside in the location of the land or has not cultivated during that period, (1) the period exceeding two years from the five years immediately preceding the transfer date, (2) the period exceeding one year from the three years immediately preceding the transfer date, (3) the period exceeding one year from the three years immediately preceding the transfer date, and (20) the period for owning the land shall be the land for non-business,

(B) It seems that each of the instant lands was actually used for farming since it was not found that the land category was actually used for other purposes as a answer. However, barring special circumstances, the instant land constitutes non-business land under Article 104-3 (1) 1 (a) of the Act, barring special circumstances, since the Plaintiffs did not reside in the location of each of the instant land until they acquired it, or did not use it because they did not cultivate it until they acquired it.

(2) Whether there are unavoidable reasons under Article 104-3(2) of the Act

(A) The purpose of the provision that the capital gains tax is imposed on non-business land under the Income Tax Act is to prevent speculative demand and hold land mainly with the actual owner by imposing capital gains tax in cases where land is owned regardless of its use.

However, Article 104-3(2) of the Act, Article 168-14(1)1 and 3 of the Enforcement Decree of the Act, and Article 83-5(1)12 of the Enforcement Rule of the Act provide that in a case where any land is not used for business due to justifiable grounds, such as change of urban planning, etc., due to the acquisition of the land, the use of the land is prohibited or restricted under the Acts and subordinate statutes, the period during which it does not constitute a non-business land. The purport of the above provisions is that in a case where the land is intended to use for business but it could not be used for business due to reasons not attributable to the owner

(B) Comprehensively taking into account each description of evidence Nos. 3 through 8 and the fact-finding results with respect to the head of ○○ City and ○○ City, the purport of the entire arguments is as follows: (a) on April 20, 199, the ○○ City decided and publicly announced each of the instant land as a △△△ District under Article 12 of the former Urban Planning Act and Article 6 of the Enforcement Decree of the Enforcement Decree; (b) on June 20, 2003 when the land readjustment project was not implemented, the ○ City decided on June 20, 2003 as the △△△△ District Unit District under Article 2 subparag. 4 of the National Land Planning and Utilization Act (hereinafter “National Land Utilization Act”); and (c) on July 5, 2003, the head of ○ City announced that the head of △△ City would limit construction permission within the △△ District District Unit District. However, each of the instant land was not subject to any restriction on the use of each of the instant land due to the change of land.

(C) If so, each of the instant lands constitutes non-business land, and each of the instant dispositions by the Defendant, which was reported as such, is legitimate.

3. Conclusion

The plaintiffs' claims are dismissed.