Cho Jae-2016- Daejeon-2722 ( October 20, 2017)

Whether the use of land is prohibited or restricted by statutes.

Since the land of this case cannot be deemed to have been specifically prohibited or restricted beyond the ordinary limit according to its use, it constitutes land for non-business use since it cannot be deemed to constitute land prohibited or restricted by statutes.

Article 168-14 of the Enforcement Decree of the Income Tax Act

2017Gudan10096 Revocation of Disposition of Imposing capital gains tax

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○ Head of tax office

May 31, 2018

July 26, 2018

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

On December 3, 2015, the Defendant’s imposition of capital gains tax belonging to the year 2014 against the Plaintiff on December 3, 2015, revoked the part exceeding ○○○○○○.

1. Facts that there has been no dispute over the disposition;

A. On March 28, 2005, the Plaintiff acquired and owned the instant land and sold it to A on October 13, 2014, and on December 31, 2014, by applying Article 70 of the Restriction of Special Taxation Act to the reduction and exemption of capital gains tax on farmland substitute land and the special deduction for long-term holding.

B. On December 3, 2015, the Defendant: (a) conducted a field investigation on the instant land; (b) deemed that the Plaintiff did not cultivate the instant land with his own labor; and (c) denied the tax amount reduced or exempted for capital gains tax pursuant to the reduction and exemption of substitute soil; and (d) denied the special deduction for long-term possession by denying the special deduction for non-business land; and (b) decided and notified the Plaintiff of the capital gains tax of 00 won for capital gains tax of 20

C. The plaintiff is dissatisfied with the disposition of this case and filed a request for a trial with the Tax Tribunal.

However, the appeal was dismissed on June 20, 2017.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Article 104-3(2) of the former Income Tax Act (amended by Act No. 12852, Dec. 23, 2014; hereinafter the same) and Article 168-14(1) of the Enforcement Decree of the same Act provide that where “where there are “the prohibition of use of land pursuant to the Act or other inevitable reasons prescribed by Presidential Decree after the acquisition of land”, it shall be excluded from land for non-business during that period, and Article 36(1) of the Urban Development Act prohibits the use of previous land for the original purpose of use and profit-making according to the effect of designation of reserved land for replotting under Article 36(1) of the same Act. As such, the instant land was excluded from land for non-business for two years and nine months (from January 12, 2012 to October 13, 2014) from the date of designation of substitute land for three years immediately before the date of designation, the portion exceeding the special deduction for long-term possession, namely, the portion exceeding the special deduction for long-term possession for capital gains for over ○ year.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Article 104-3 (1) 1 (a) of the former Income Tax Act provides that "land, the owner of which does not reside in the location of farmland or which is not cultivated by himself/herself, during the period determined by Presidential Decree during which he/she owns the pertinent land, shall be deemed land for non-business use in principle, and Article 104-3 (2) of the Income Tax Act and Article 168-14 (1) 1 of the Enforcement Decree of the Income Tax Act provides that where the use of land is prohibited or restricted by statutes after acquiring it, the period during which the use thereof is prohibited or restricted shall be deemed the period of business use and the period of prohibition or restriction shall be deemed the period of business use."

2) The instant land was designated as an urban development zone and a development plan was publicly announced on October 10, 2008 as a site belonging to ○○○ Urban Development Project, and on February 21, 2011, the alteration of an urban development project and the authorization of an implementation plan was granted (a project under the Urban Development Act and a project under the Urban Development Act). On January 11, 2012, the instant land was designated and publicly announced as a land scheduled for replotting included in a group of block 2-1 block substitution in an urban development project zone, and the fact that the housing construction project plan was approved on June 11, 201 and reported on March 19, 2015 does not conflict between the parties.

On the other hand, if the land category in the public record of this case is inferred to the purport of the entire pleadings in the entries and videos (including the paper numbers) in Eul evidence Nos. 5 through 7, it can be recognized that the land category in the public record of this case is "responding", and AAA by proxy on behalf of the plaintiff from October 10, 2008 to December 31, 2012 as farmland, and according to the annual airline margin on the land of this case, even around April 2012 and around April 2013, it can be recognized that the surrounding land including this case was used as farmland and was used and cultivated as farmland at the time of transfer.

It is reasonable to interpret that the above provision as the ground for the Plaintiff’s assertion is excluded from the idle land during the period when a farmland owner becomes unable to use the relevant land as farmland pursuant to the statutes. If the land was designated as a reserved land for replotting is excluded from the idle land in a uniform manner without individual review, the Plaintiff’s benefit would be granted to the land owner for speculative purposes so that the Income Tax Act does not allow the special deduction for long-term possession of the idle land. In addition, it is unfair because the Plaintiff’s benefit would be deprived of the purport of not allowing the special deduction for long-term possession of the idle land. Moreover, it is difficult to view that the land was actually constructed as a partitioned unit of the urban development project under the Urban Development Act under subparagraphs 8 and 12 of Article 168-14 of the Enforcement Rule of the Income Tax Act (Amended by Presidential Decree No. 26067, Feb. 3, 2015) which was delegated by the Plaintiff (amended by Ordinance of the Ministry of Strategy and Finance No. 459, Feb. 13, 2015).

Ultimately, the instant land cannot be deemed to have been specifically prohibited or restricted beyond the ordinary limits according to its usage, and thus cannot be deemed to constitute land, the use of which is prohibited or restricted pursuant to statutes. Therefore, the instant disposition is lawful.

3. Conclusion

Thus, the plaintiff's claim shall be dismissed as it is without merit.