If it is merely an indirect management of agriculture with a focus on other occupation, it is self-confiscing

not considered a legitimate box.

Even if a direct farming is engaged in another occupation, it shall be applicable to a self-employed farmer, but if it is only an indirect management of agriculture with the belief of the other occupation, it shall not be deemed as a self-employed farmer.

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

2012Guhap5122 Revocation of Disposition of Imposing capital gains tax

1.A 2.MaximumB

Head of North Busan District Tax Office

September 26, 2013

October 24, 2013

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

Cheong-gu Office

The Defendant’s imposition of the principal income tax for the transfer income tax for the year 2010 on March 2, 2012 against Plaintiff ChoA, the imposition of the OOOOOOOO on April 1, 2013, the imposition of the penalty tax for the transfer income tax for the year 2010, the imposition of the principal tax for the transfer income tax for the year 2010 on March 2, 2012, and the imposition of the additional income tax for the transfer income tax on April 1, 2013 is revoked.

1. Details of the disposition;

A. The Plaintiffs are married couple.

B. On April 15, 2002, Plaintiff ChoA acquired ownership of 1489-2 O-dong O-dong 3,035 square meters (hereinafter “instant land”). The said land was transferred to the Busan Urban Corporation on the ground of the acquisition of co-ownership of public land on December 9, 2010.

C. On November 8, 199, Plaintiff LB acquired ownership of the OO-dong 1492-18 m2, 1492-19 m2, 1492-19 m2, 1983 m2, 344-21 m25 m2, 344-25 m25 m2,079 m2, 2002 O-dong O-dong 1492-19 m2,162 m2 (hereinafter collectively referred to as “the instant land”) on April 15, 200, each of the instant land was transferred to Busan Public Corporation due to consultation on December 27, 2010.

D. On February 28, 2011, the Plaintiffs filed an application for reduction or exemption of capital gains tax pursuant to Article 69 of the former Restriction of Special Taxation Act (amended by Act No. 11232, Jan. 26, 2012; hereinafter the same shall apply) on the ground that Plaintiff Cho Young-A filed a tax base return on each of the instant lands Nos. 1 and 2, and Plaintiff ChoiB-B, respectively, for at least eight years. However, on March 2, 2012, the Defendant did not apply the said reduction or exemption provision on the ground that the Plaintiffs did not directly cultivate the instant lands for at least eight years, and instead, applied the said reduction or exemption provision on the ground that the Plaintiffs did not directly cultivate the instant lands for at least eight years, and that the said provision on the reduction or exemption was imposed on Plaintiff Cho Young-A-A-B, the additional tax amount of KRW 1 and 2, the additional tax amount of KRW 010 of KRW O, the additional tax amount of KRW 2010.O.

E. On May 9, 2012, the Plaintiffs filed an appeal seeking revocation of each of the above dispositions with the Tax Tribunal. However, each of the claims was dismissed on July 17, 2012.

F. On April 1, 2013, when the lawsuit of this case was pending, the Defendant revoked ex officio each of the above imposition dispositions, and then re-exempt each of the same amounts (hereinafter referred to as "each of the instant dispositions") to the Plaintiffs by clarifying the type of each additional tax, calculation basis, etc. (hereinafter referred to as "each of the instant dispositions") by stating the Plaintiffs’ imposition of the principal income tax on each of the transfer income tax as of March 2, 2012 and imposition of each transfer income tax on April 1, 2013.

[Reasons for Recognition] The facts without dispute, Gap evidence 1-2-1-2, Eul evidence 1-6, the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiffs' assertion

1) The Defendant illegally fabricated the strongCC’s written confirmation and took each of the instant dispositions based on it, which constitutes a violation of the principle of good faith under Article 15 of the Framework Act on National Taxes and an abuse of tax investigation authority under Article 81-4 of the same Act

2) The meaning of "direct cultivation" under Article 69 (1) of the former Restriction of Special Taxation Act is not a small, lease, or consignment management, but a case where a person is employed and cultivated under his/her own account and responsibility. Article 66 (13) of the former Enforcement Decree of the Restriction of Special Taxation Act, which provides different contents, shall be deemed as an literary and exemplary provision or shall be deemed null and void as it goes beyond the limit of the legislative delegation.

3) The Defendant must prove that the Plaintiffs did not directly cultivate the land Nos. 1 and 2 of this case. However, the Defendant failed to prove this.

Therefore, each disposition of this case is unlawful.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) Whether the procedure for tax investigation is unlawful

According to Article 15 of the Framework Act on National Taxes, when a tax official performs his/her duties in good faith and sincerity, and according to Article 81-4 (1) of the same Act, a tax official shall conduct a tax investigation to the minimum extent necessary to realize appropriate and fair taxation, and shall not abuse his/her right of investigation for any other purpose.

As to the land Nos. 1 and 2 of this case, as to whether or not the content of the document under the name of the Gangnam (Evidence No. 8) stating that the plaintiffs had been a farmer for a considerable period from the time when the plaintiffs acquired it, it is difficult to obtain a signature and seal without confirming the content of the document, and as to whether or not the content of the document under the name of the Gangnam (Evidence No. 8), the plaintiffs found KimD, the wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's wife's statement and signed and sealed it, the plaintiffs's statement is hard to obtain the above revised and sealed.

Rather, comprehensively taking account of the evidence Nos. 7 and 8’s written evidence, witness E’s testimony, and witness CC’s witness testimony, the above written evidence did not directly prepare the document, but only can it be recognized that the document was signed and sealed by the party who is a public official in charge of the Defendant’s tax investigation, E, NAF’s preparation of the statement of the strongCC, and the document was confirmed by the strongCC, and the document was signed and sealed by DaD at the site.

Therefore, this part of the plaintiffs' assertion is without merit.

2) The meaning of "direct cultivation"

A) According to Article 104-3(1)1 of the former Income Tax Act (amended by Act No. 10924, Jul. 25, 201); Articles 168-6 subparag. 1 and 168-8(2) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 23723, Apr. 13, 2012; hereinafter the same), and Article 2 subparag. 5 of the Farmland Act, farmland owner is farmland, the farmland owner of which does not reside in the farmland for a given period, or does not own farmland, and land is subject to capital gains tax by applying the tax rate of 60/100 of the tax base for non-business. The scope of farmland not cultivated by himself/herself is determined to be farmland excluding farmland self-major under Article 2 subparag. 5 of the Farmland Act.

In addition, Article 69(1) of the former Restriction of Special Taxation Act, Article 66(1) and Article 66(13) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 23718, Apr. 10, 2012) provide that in order for the transferor to be eligible for reduction or exemption of capital gains tax, the transferor shall be recognized to have resided in a Si/Gun/Gu where the farmland is located or a Si/Gun/Gu adjacent thereto, or a Si/Gun/Gu where the farmland is located and cultivated directly for not less than 8 years from the time of acquisition until the time of transfer, and "direct cultivation" means that the transferor is engaged in cultivating crops or growing perennial plants on his/her own farmland or cultivating or growing them with his/her own labor.

Meanwhile, Article 2 subparagraph 5 of the Farmland Act (amended by Act No. 4817 of Dec. 22, 1994) provides that "self-cultivation" refers to a farmer who is engaged in cultivating crops or growing perennial plants in his/her own farmland at all times, or growing or growing at least half of farming work with his/her own labor, or an agricultural corporation cultivates crops or growing perennial plants in its own farmland.

나) 위와 같은 각 규정의 의미와 ① 양도소득세 중과세 대상에서 제외되는 사업용 토지인 농지에 해당하는지 여부와 관련하여 구 소득세법 시행령은 농지법 제2조 제5호의 '자경'에 관한 규정을 적용하도록 하고 있는데, 양도소득세를 전면 감면하는 구 조세특례제한법이 정한 '직접 경작'하는 토지의 범위를 이와 달리 볼 이유가 없는 점, ② '직접 경작'은 '자경(自藉)'의 사전적 의미와 부합하고, 구 조세특례제한법 제69조의 조문 명칭은 '자경농지에 대한 양도소득세의 감면'으로 자경이라는 표현을 쓰고 있는 점, ③ 입법 연혁을 살펴보면, 구 소득세법(1993. 12. 31. 법률 제4661호로 개정되기 전의 것) 제5조 제6호 라목에서 '양도할 때까지 8년 이상 계속하여 자기가 경작한 토지로서 농지세의 과세대상(비과세 ③ 감면과 소액부징수의 경우를 포함한다)이 되는 토지 중 대통령령이 정하는 토지의 양도로 인하여 발생하는 소득'을 비과세소득으로 규정하여 8년 이상 자경농지를 양도하는 경우 양도세를 전액 비과세하였던 것을, 양도세 감면종합한도의 적용을 받도록 하기 위하여, 위 조항을 삭제하고 구 조세감면규제법 (1993. 12. 31. 법률 제4666호로 전문 개정되어 1998. 12.28. 법률 제5584호 조세특례 제한법으로 전문개정되기 전의 것) 제55조에서 '8년 이상 계속하여 직접 경작한 토지로서 농지세의 과세대상(비과세 ・ 감면과 소액부징수의 경우를 포함한다)이 되는 토지 중 대통령령이 정하는 토지의 양도로 인하여 발생하는 소득'에 대하여는 양도소득세 또는 특별부가세를 면제하는 규정을 신설한 것인 점 등을 종합적으로 고려하면, '자경' 과 '직접 경작'은 농지 소유자 주도형 경작을 보호하거나 장려하기 위한 입법 목적을 실현하기 위한 통일한 개념이라고 할 것이므로, '직접 경작'이 인정되기 위해서는 농업 경영인과는 달리 농업인과 농지의 장소적 ・ 시간적 근접(상시 종사) 또는 농업인 자신 의 1/2 이상의 직접적인 노동력의 투입이 필요하다고 할 것이고, 이에 따라 농지소유 자가 농업 이외의 다른 직업을 가진 상태에서 다른 사람을 고용하여 농지를 경작하면 서 간헐적으로만 직접 경작하는 경우는 양도소득세 감면대상에서 제외되어야 할 것이다.

C) As above, Article 69(1) of the former Enforcement Decree of the Restriction of Special Taxation Act delegates a specific scope to Presidential Decree by declaring the land directly cultivated for at least eight years as the object of exemption from capital gains tax. Article 66(4) through (8) of the Enforcement Decree of the same Act provides for the subject of exclusion from the farmland cultivated by himself/herself for at least eight years, and Article 2 subparag. 5 of the Farmland Act provides for the specification of the meaning of "direct cultivation" in the contents consistent with the self-regulation provision under Article 2 subparag. 5 of the same Act. Thus, Article 66(13) of the former Enforcement Decree of the Restriction of Special Taxation Act does not have any provision on delegation or it goes beyond the bounds of the delegation business Act, and thus, it cannot be said that the provision on invalidation is not a provision (see Supreme Court Decision

D) Therefore, this part of the plaintiffs' assertion is without merit.

3) The burden of proof

Pursuant to the above relevant provisions, the burden of proving the fact that the transferred land had been cultivated directly for not less than eight years while residing in the location of the land (see, e.g., Supreme Court Decision 2002Du7074, Nov. 22, 2002) is a taxpayer who asserts exemption of capital gains tax pursuant to the relevant provision.

As to this, the Plaintiffs stated that the Plaintiff’s land Nos. 1 and 2 in the farmland ledger against the Plaintiffs are self-sufficient, the burden of proof is converted, and the Defendant asserts that the Plaintiffs should prove that they did not cultivate each of the instant land Nos. 1 and 2. However, considering the fact that the establishment of the farmland ledger only formally exists for various kinds of tax reduction and exemption, and that the establishment of the farmland ledger is not sufficient for administrative agencies to examine it, the burden of proof can not be deemed to be converted solely on the entry of the farmland ledger.

Therefore, this part of the plaintiffs' assertion is without merit.

4) Whether the plaintiffs directly cultivated the first and second lands of this case

Considering the overall purport of the arguments in the statement Nos. 3 through 6-3, Eul evidence Nos. 13, and 14, in the farmland ledger prepared by the head of OO-gu O-B, the fact that the plaintiff Cho Jae-A stated that the land of this case and the land No. 2 of this case are cut-off by the plaintiff Cho Jae-A-B-B-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P-P.

However, in full view of the following circumstances, the witness 1 and 2’s evidence Nos. 2-1 and 2, the witness Hah, the witness Hah, the strongCC’s testimony, and the witness 2’s testimony, the Plaintiffs’ testimony, which corresponds to the fact that the Plaintiffs directly cultivated land 1 and 2 for not less than eight years prior to the date of transfer, is difficult to believe it as it is, and there is no other evidence to acknowledge it.

① From April 18, 1980 to February 28, 2009, Plaintiff Cho Young High School operated a miscellaneous point with the trade name “MM miscellaneousization” as from August 11, 2006, and from July 1, 2009, Plaintiff Cho Young High School was registered as the representative director of the “MM Sea State of the Stock Company”, and Plaintiff B operated several restaurants with the trade names during the period of ownership of the instant land 2, including MM Maritime State (2), N NN, and PP due diligence. In view of the above status of the Plaintiffs, it seems that the number of available hours during which the Plaintiffs could engage in direct contact with agriculture was not much much.

② Since 2007, Plaintiff Cho Jae-A submitted the details of purchase of agricultural materials, including each pesticide from 2009, and Plaintiff ChoiB had not submitted any evidentiary materials regarding the payment of expenses incurred in farming operations.

③ The Plaintiffs asserted that dry field farming was made after embling rice shed at first in the land Nos. 1 and 2, and that the yield was not high due to the lack of yield. The embbling period can be seen to have been since 2005 even based on the Plaintiffs’ assertion itself at the time of filing a tax appeal. A witness HH, this II, after the Plaintiffs acquired the instant land Nos. 1 and 2, made a statement that the rice farming company was directly located in and around the land, and the dry field farming company was deemed to have been located in and directly located in the Plaintiff LbB after embling, and the dry field farming company was made at the request of the Plaintiffs from 202 to 203. The period of transfer of the instant land seems to have been 1B, even if the Plaintiff was the employee of the MMM Seaheading Party, which was operated by the Plaintiffs.

④ Barred rice farmers consisting of fryer, fryer, water depth, air, miscellaneous extraction, pesticide dust, fertilizer roots, drilling, drilling, etc. Of them, the strongCC did work, such as fryer, fryer, and drilling. In light of the importance and importance of each of the above work performed by the strongCC, even if the plaintiffs directly work, it appears that it does not reach 1/2 of the total agricultural work.

⑤ The size of the land No. 1 in this case is 3,035 square meters, and the total size of the land No. 2 in this case is 6,978 square meters (61 square meters + 1,983 square meters + 93 square meters + 2,079 square meters + 2,162 square meters) and is very wide in direct cultivation by the Plaintiffs, who are not full-time farmers. However, the Plaintiffs reported that they purchased an agricultural bitr around December 1, 2010, immediately before the date of the transfer of the land No. 1 and No. 2 in this case, and the Plaintiffs did not submit objective evidentiary materials to recognize that they had possession of any agricultural machinery prior to the purchase of the above agricultural bitr (the testimony by the JJ to the effect that the Plaintiffs had old biter before the purchase of the above agricultural bitr was difficult to believe that the Plaintiffs did not have any assertion during the tax trial process to the date of closing argument in this case).

(6) As seen earlier, in light of the reality of the preparation of the farmland ledger, the mere fact that the Plaintiffs respectively stated in the farmland ledger that they had cultivated the land Nos. 1 and 2 of this case, it cannot be deemed as a matter of course that the fact that the Plaintiffs directly cultivated the land Nos. 1 and 2 of this case.

Therefore, all of the plaintiffs' arguments premised on the direct cultivation of land Nos. 1 and 2 of this case are without merit, and each of the dispositions of this case is legitimate.

3. Conclusion

Therefore, the plaintiffs' claims are dismissed in entirety as it is without merit. It is so decided as per Disposition.