Daejeon District Court 2014Gudan729 ( October 29, 2014)

Seoul High Court Decision 2014No. 45 (O27, 2014)

Cancellation of Capital Gains Tax Imposition Disposition

It is insufficient to recognize that the Plaintiff and the designated person, who appears to have been seeking profit from the development of the instant land after having a separate occupation as university professor, had been engaged in the cultivation of crops in the instant land or cultivated not less than 1/2 of the necessary farming work with their own labor until the time of transfer, etc. for not less than three years.

Daejeon High Court 2014Nu11661 Revocation of Disposition of Imposing capital gains tax;

OOO and one other

00. Head of tax office

Daejeon District Court Decision 2014Gudan729 Decided August 29, 2014

November 27, 2014

on 15, 2015

1. All appeals by the plaintiffs (appointed parties) are dismissed. All appeals by the plaintiffs are dismissed.

2. The costs of appeal shall be borne by the Plaintiff (Appointed Party).

The decision of the first instance court shall be revoked. The disposition of capital gains tax imposed by the Defendant on April 2, 2013 against the Plaintiff (appointed party; hereinafter referred to as the “Plaintiff”) and the Appointed (hereinafter referred to as the “Appointed”) shall be revoked.

1. Details of the disposition;

A. As a husband and wife, the Plaintiff and the selected acquired on May 20, 2005 1/2 shares of each of the ownership of 00 00 Gun 00 Gun 00 Gun *****-1 1,691 m2 (hereinafter “instant land”) and transferred on August 30, 2012.

B. On October 30, 2012, the Plaintiff and the selector filed an application for reduction or exemption under Article 70(3) of the Restriction of Special Taxation Act with the Defendant by filing a preliminary return on capital gains tax.

C. On April 2, 2013, the Defendant rejected the reduction or exemption on the ground that “the instant land is difficult to be deemed farmland at the time of transfer, and the Plaintiff and the selector did not directly cultivate for three years or more, and thus does not meet the requirements for reduction or exemption” and imposed an imposition of capital gains tax (including additional tax) 16,69,480 won for the year 2012 (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 7, 9, Eul evidence 1 and 2 (including paper numbers; hereinafter the same shall apply)

Each entry, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

From March 7, 2008 to November 5, 2010, the Plaintiff and the Selection made the instant disposition based only on the fact that the Plaintiff and the Selection filed a civil petition and a petition against the Plaintiff and the Selection for the establishment of the building materials lease business with the name “mm industry” as the place of business. However, the Plaintiff and the Selection filed an application for the construction permit on the instant land on May 20, 2008, but they did not perform the construction act until the construction permit was revoked on April 14, 2010; the farmland preservation charges paid at the time of filing an application for the construction permit on May 2010; the Defendant received the farmland preservation charges from the Plaintiff and the Selection on several occasions on the basis of the fact that the Plaintiff and the Selection filed a civil petition and a petition against nearby residents; however, the Plaintiff and the Selection were within 20 minutes of the instant land from their home to the date of acquisition; the Plaintiff and the Selection were within the scope of 20 years of the farmland of this case; and 10 days of the farmland.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) Article 70 of the Restriction of Special Taxation Act and Article 67 of the former Enforcement Decree of the Restriction of Special Taxation Act purported to protect farmers through free substitution and guarantee of farmland, or to develop and encourage agriculture. Thus, the acquisition and sale of farmland after the acquisition shall be limited to the case where the farmland owned by the self-employed farmer is intended to substitute for the purpose of cultivating the farmland (see Supreme Court Decision 2002Du59245, Sept. 5, 2003). Thus, if the owner of the farmland wishes to have the capital gains tax reduced or exempted pursuant to the same provision, he must directly cultivate the previous farmland for the same period, while residing in the previous location for at least three years. Here, direct cultivation refers to the case where a resident engages in the cultivation of crops or perennial plants, or cultivates or cultivates them with his own labor, and the previous farmland shall be farmland which is cultivated or cultivated directly even as of the date of transfer. In addition, the fact that the owner of the farmland is obligated to prove it.

2) 살피건대, 갑 1 내지 6, 12, 16, 17, 21호증의 각 기재 및 영상에 변론 전체의 취지를 더하면, 원고가 2008. 4. 11.부터 2012. 4. 13.까지 부추, 열무, 쑥갓, 아욱, 옥수수 등 농작물, 퇴비, 적송(소나무) 20주 등 합계 1,411,200원 상당의 농작물 등을 구입하였던 사실, 원고나 선정자가 직접 혹은 00 00군 00면 00리 이장을 역임하였던 ooo이나 지인인 aaa, fff의 도움을 받아 이 사건 토지의 일부에 농작물을 경작한 사실, 2007. 8. 16. 최초 작성된 농지원부에는 원고가 이 사건 토지를 자경하는것으로 기재되어 있는 사실, 00면장이 발급한 2013. 2. 8.자 자경증명이 있는 사실, 원고와 선정자가 아래에서 보는 바와 같이 이 사건 토지에 건축을 하려고 하면서 00군수에 농지보전부담금을 납부하였다가 건축신고 취소를 하면서 2010. 8.경 농지보전부담금을 환급받은 사실은 인정된다.

Meanwhile, comprehensively taking account of each of the above evidence, Gap evidence Nos. 10, Eul evidence Nos. 3 through 5, and 8 and the overall purport of the arguments, the plaintiff and the selected person registered the business of the trade name of "mmm-meter industry" for the purpose of leasing construction materials using the land of this case as the place of business from March 7, 2008 to November 5, 2010, and the plaintiff and the selected person newly constructed the first class neighborhood living facilities (retail store) of 198 square meters of the building area on the land of this case to the 00-Gun Office on May 20, 208, respectively.

A. On April 13, 2010, the building report was revoked on April 14, 2010 by submitting a document to the 00 Military Service for revocation of the building report; ③ the Plaintiff and the Selection obtained permission to occupy and use part of the instant land from the head of April 28, 2010; and ④ the head of Geumsan Gun performed molding for landscape growing around May 7, 2010; ④ the Plaintiff and the Selection to restore the instant land to the ground of the design received at the time of applying for development activities; ② the Plaintiff and the Selection to restore the instant land to the original farmland; ③ the Plaintiff and the Professor to remove soil and sand on the instant land on the instant land on the condition that it is difficult for the Plaintiff to obtain land on the condition that it is difficult for the Plaintiff to obtain land on or after the issuance of the land on April 28, 2010; ⑤ the Plaintiff and the Professor to use the land on the original farmland on the 20th of August 7, 2012.

In full view of the above legal principles and the above facts and circumstances, although the plaintiff and the selected person seem to have been engaged intermittently in farming work on part of the land of this case, in light of the purpose of Article 70 of the Restriction of Special Taxation Act of the protection of farmers through free substitution and guarantee of farmland, and the development and encouragement of agriculture, it is insufficient to recognize that the above recognized facts alone have a separate occupation, and that the plaintiff and the designated person were to have been pursuing profits from the development of the land of this case after the building report on May 20, 2008, and that they had a large size of 1,691 square meters, which are 1,691 square meters in total engaged in cultivating crops in the land of this case or 1/2 or more of the necessary farming work with their own labor until August 30, 2012, and there is no evidence to recognize otherwise.

3) Therefore, the instant disposition is lawful since the income accrued from the transfer of the instant land is not subject to reduction or exemption of capital gains tax. The Plaintiff’s assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.