Whether farmland subject to donation under Article 58(1) of the former Regulation of Tax Reduction and Exemption Act, which is a provision on exemption from gift tax, shall be farmland directly cultivated by the donor (affirmative)

Article 58(1) of the former Regulation on Tax Reduction and Exemption (amended by Act No. 5163 of Oct. 2, 1996) provides that where a farmer, who is self-employed as prescribed by the Presidential Decree, donates farmland, etc. to one child engaged in farming, gift tax on the value of the farmland, etc. shall be exempted, and Article 57(1)2 of the former Enforcement Decree of the Regulation on Tax Reduction and Exemption (amended by the Presidential Decree No. 15197 of Dec. 31, 1996) of the former Enforcement Decree of the Regulation on Tax Reduction and Exemption (amended by the Presidential Decree No. 15197 of Dec. 31, 1996) provides that "a farmer shall be engaged in direct farming continuously for two or more years retroactively from the date of donation of the farmland, etc." This provision provides that exemption of gift tax shall apply only to cases where a donor cultivates the farmland subject to donation for two or more consecutive years, and unlike this, it does not apply to cases where the farmland subject to donation is a donation without any other farmland.

Article 58 (1) (current Deletion) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 5163, Oct. 2, 1996); Article 57 (1) 2 (current Deletion) of the former Enforcement Decree of the Regulation of Tax Reduction and Exemption Act (amended by Presidential Decree No. 15197, Dec. 31, 1996)

Plaintiff (Law Firm Squa, Attorney Park Jong-hwan, Counsel for plaintiff-appellant)

Head of Seogju Tax Office

Gwangju High Court Decision 2002Nu317 delivered on October 31, 2002

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The court below confirmed on March 1, 1995 that Nonparty 1, the owner of the farmland of this case, determined the lease period of the farmland of this case to Nonparty 2 and KRW 200,000 per annum on March 1, 1995. In light of the records, the court below's finding of facts is justified, and there is no violation of the rules of experience or incomplete hearing, as alleged in the grounds of appeal No. 1 and No. 2.

Meanwhile, Article 58 (1) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 5163 of Oct. 2, 1996) provides that where a farmer, who is self-employed, as prescribed by the Presidential Decree, donates farmland, etc. to one child engaged in farming, gift tax on the value of the farmland, etc. shall be exempted. Article 57 (1) 2 of the former Enforcement Decree of the Regulation of Tax Reduction and Exemption Act (amended by Presidential Decree No. 15197 of Dec. 31, 1996) provides that "a farmer, who is self-employed, shall be engaged in farming continuously for not less than two years retroactively from the date of donation of the farmland, etc." The exemption of gift tax pursuant to these provisions provides that the exemption of gift tax shall apply only to cases where the donor directly cultivates the farmland subject to donation for not less than two years and donates it without being self-employed and does not apply to cases where the farmland subject to donation is insignificant without any other farmland, it shall not be accepted from the third party's ground of appeal.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition.

Justices Lee Yong-woo (Presiding Justice)