Cho High 201 Jeon 3014 ( December 08, 2011)

It is difficult to recognize that the land was commenced to cultivate the substitute land within one year from the date of transfer of the previous land.

In light of the fact that real estate brokerage business has been operated, and the purchase details of farming machinery and tools necessary for self-defense have not been submitted at all, and the large land has been left away from the domicile and has been left unattended without farming and has been designated as farmland due to no farming conditions, etc., it is difficult to recognize that it cultivated the large land within one year from the date of transfer of the previous land.

Article 70 of the Restriction of Special Taxation Act

2012Gudan381 Revocation of Disposition of Imposing capital gains tax

Ansan

The director of the tax office

July 26, 2012

August 24, 2012

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 000 for the year 2009 against the Plaintiff on March 1, 201 is revoked.

1. Details of the disposition;

A. On June 4, 2005, the Plaintiff acquired the answer 000-07 Do-dong 016 m2 (hereinafter “former land”) on June 2, 2009, and transferred it on June 2, 2009. On October 9, 2009, the distribution period of the land within one year thereafter was 575 m2 (hereinafter “instant land”).

B. On May 31, 2010, the Plaintiff applied Article 70(1) of the former Restriction of Special Taxation Act (amended by Act No. 9921, Jan. 1, 2010; hereinafter the same) that provides for the reduction or exemption of capital gains tax for the farmland when filing a preliminary return on the tax base of capital gains tax for the transfer of the previous land to the Defendant in 2009 following the transfer of the previous land.

C. On March 11, 201, the Defendant decided and notified the Plaintiff on March 11, 201, on the ground that the land category of the instant land was not actually used as a paddy field or farmland, and that the Plaintiff cannot be deemed to have self-defluenced the instant land, thereby satisfying the non-taxation requirements by substitute land for farmland (hereinafter “instant disposition”).

D. The Plaintiff appealed and filed a tax appeal on August 12, 201, but the Tax Tribunal dismissed the petition on December 8, 201.

[Ground of recognition] Facts without dispute, Gap 1, 2, 3 evidence, Eul 1, 2, and 4 evidence (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Since the Plaintiff resided in the location of the instant land and directly cultivated the lost water on the instant land, etc., income from the transfer of the instant previous land is subject to reduction of capital gains tax due to the substitute farmland under Article 70(1) of the Restriction of Special Taxation Act, but the instant disposition made on a different premise is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Article 70(1) of the former Restriction of Special Taxation Act and Article 67(1), (2), and (3)1 of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 22037, Feb. 18, 2010) shall be construed as a provision to protect self-employed farmers and encourage agriculture by allowing and guaranteeing free substitution of farmland. The subject of reduction or exemption shall be limited to a case where the farmland acquired and cultivated by a self-employed farmer is to substitute for the necessity for cultivation. Therefore, in order to constitute reduction or exemption of capital gains tax due to substitute farmland, ① the previous land and newly acquired land shall be farmland, and ② the former land and newly acquired land shall be directly cultivated while residing in a new location for at least three years, and shall be directly cultivated while residing in a new location for at least three years, ③ the person liable for payment of capital gains tax shall begin to acquire new farmland and bear the burden of proof within one year from the date of transfer of the previous land, and ④ at least 1/2 of the value of the farmland newly acquired land shall be directly or directly owned by the Plaintiff.

2) As to whether the Plaintiff started the cultivation of the instant land within one year from the date of transfer of the instant previous land, the following circumstances are revealed as to whether the Plaintiff started the cultivation of the instant land, namely, ① from June 16, 2003 to the Daejeon PY 00-3 building located in Daejeon PYdong-dong, YY Licensed Real Estate Agents, and ② the Plaintiff alleged that the said real estate brokerage business was merely for small distance, and the farming company was the main business. However, the Plaintiff’s employees, including the instant land, were not present at all objective materials about the purchase of farming equipment, agricultural chemicals, fertilizers, etc., or sales of harvested land due to farming death, or the overall purport of the pleadings. ③ The Plaintiff’s residential environment, including those of his family members, is not sufficient to find that the Plaintiff’s residential environment, including those of the instant land, was located within the 1st century and that there was a lack of distance from the Plaintiff’s residential area, and that there was no evidence about the transfer of the instant land.

Therefore, the Plaintiff’s transfer of the previous land does not constitute an exemption from capital gains tax pursuant to farmland substitute land. Therefore, the instant disposition is lawful on the same premise.

3. Conclusion

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