Early High Court Decision 2008J 3761 (Law No. 30, 2009)

Appropriateness of the assertion that farmland was self-refised directly;

Even if the workplace was located near the location of the farmland, the Plaintiff was able to live in a division after marriage and had a stable income while working for the corporate company from the age of 25 to the age of 25, the Plaintiff’s livelihood appears to have been maintained as earned income.

The contents of the decision shall be the same as attached.

1. The plaintiff's claim is dismissed.

2. The plaintiff shall bear the litigation costs.

The Defendant’s disposition of imposition of KRW 788,970,370 for the Plaintiff on September 1, 2008 shall be revoked.

1. Circumstances of dispositions;

A. On January 11, 1996, the Plaintiff acquired ○○-si ○○-dong 249-3 2,264 square meters and 149-4 2,472 square meters and 2,472 square meters in total (hereinafter referred to as “marketed farmland”) and transferred the acquisition value to ○○-si ○-dong 249-3 2,264 square meters in total to 15 February 15, 2008 (acquisition value 181,83,454 won, transfer value 1,94,219,240 won).

B. The Plaintiff filed a transfer income tax report on farmland directly cultivated for not less than eight years in February 2008 on the ground that it is subject to reduction or exemption of the transfer income tax. However, the Defendant denied direct farming and applied 60% tax rate for land for non-business on September 1, 2008, and notified KRW 78,970,370 for the transfer income tax for the year 2007 (hereinafter “instant disposition”).

C. The Plaintiff requested a judgment to the Tax Tribunal on September 30, 2008, but was dismissed on June 30, 2009.

[Grounds for Recognition] Class A 1, Category B, Category B, Category B 1, and Category 7 (including each number), the purport of the whole pleading

2. Whether a disposition is lawful

A. The plaintiff's assertion

As the Plaintiff had been living in ○○○ City, which is a location of the farmland, and had been directly cultivated for at least eight years, the instant disposition of imposing capital gains tax without reduction or exemption is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) According to the main sentence of Article 69(1) of the former Restriction of Special Taxation Act (amended by Presidential Decree No. 9276 of Dec. 29, 2008), Article 69(1) of its Enforcement Decree (amended by Presidential Decree No. 20620 of Feb. 22, 2008), and Article 66(1), (4), and (12) of its Enforcement Decree (amended by Presidential Decree No. 20620 of Feb. 22, 2008), in order for the transferor to obtain a reduction or exemption of capital gains tax on self-arable farmland, he/she directly cultivated the farmland for at least eight years from the time he/she acquired the farmland in a location of the Si/Gun/Gu where the transferor is located until the time he/she transfers the farmland. The "direct cultivation" here refers to engaging in the transferor's full time in cultivating crops or growing

In addition, as part of the land farming policy called the preservation of farmland and the promotion of agriculture, the legislators granted benefits to farmers in particular by reducing the tax burden due to the transfer of farmland by self-employed farmers for not less than eight years as part of the land farming policy, and such preferential measures of tax reduction and exemption should be exceptionally permitted within a limited scope (see, e.g., Constitutional Court Order 2002HunBa2, Sept. 19, 2002). In order to constitute "direct farming" according to the provisions of the above provision, time and place of farmers and farmland;

The requirements for direct labor (not less than 1/2 of the own labor force) of farmers should be met, and the owner-led cultivation should be the owner-led cultivation.

2) The key issue in this case is whether or not the Plaintiff was engaged in farming at issue on a regular basis or with 1/2 or more of farming work in the farmland at issue.

A)The following facts may be acknowledged according to each of the statements, Gap evidence 4-1, 2, 5, 7, and 18-1, 5, and 18-1, and the purport of the whole pleadings:

① ○○○-dong 262, ○○-dong 2007, which falls under the location of the farmland at issue, resided from the Plaintiff’s birth to December 21, 2007, and has been engaged in agriculture while owning a lot of land and a return. ② The Plaintiff moved to the address above the address of 1993, and ○○-si in 1997, after marriage in 1996, was divided into 197 and has been residing until now. The distance from the place of residence to the farmland at issue is about 4 km, and about 1 km from the place of work to the farmland at issue.Third, in the farmland ledger prepared on July 27, 200, the farmland division of farmland at issue is considered as 'self cultivation', and 'd rice cultivation direct payment' for rice income from 204 to 208.

(b)However, on the other hand, according to the respective descriptions of Gap evidence Nos. 10-2, Eul evidence No. 2, 3, and 4, and the purport of the whole pleadings, the following facts may be acknowledged:

① From 195 to August 21, 2008, the Plaintiff has been working at the engine inspection team, etc. of ○○○○○○○○ △△-dong from 1995 to 208. The Plaintiff was paid KRW 5,240,00 annually, KRW 6,1430,00 per annum 206, and KRW 94,000 per annum 207. From 2005 to 2007, the Plaintiff was on annual average night work 94 and 80 days of absence. ② The Plaintiff asserts that there was no agricultural machinery owned by leB (the Plaintiff claimed that her had been spawd from farmland by using agricultural machinery and agricultural chemicals attached to leB).

C) Comprehensively taking account of the above facts, even if the plaintiff was residing in the location, and the workplace was near the location, the plaintiff was able to live in the division after marriage and had a stable income while working in the area of Do governor from the age of 25 to the age of Do governor, the plaintiff's living appears to have been maintained as earned income in Do governor. (2) Considering that the plaintiff's living is mainly used in Do governor about the farmland at issue as the plaintiff's argument, the situation and occupation of the plaintiff, the situation and occupation as seen above, the situation of the plaintiff's living outside the normal working hours, the situation and occupation, the situation of the plaintiff's living outside the normal working hours, the fact that the plaintiff was not holding the farming machine at all, and the plaintiff acquired farmland at 26 years old and over the age of 26, it cannot be viewed that the plaintiff actually demanded the plaintiff's farmland to have been directly cultivated and that the farmland owned by Do governor was directly cultivated as the main issue of direct payment, and there is no room to view that the plaintiff's direct payment of farmland.

In addition, Gap evidence 6-1, 2, 3, Gap evidence 8-1 through 8, Gap evidence 9-1 through 7, and Eul evidence 9-1 through 7 (the head of water village where the person resides in the location of the farmland) * In November of each year from 2006 to 2008, ** in the purchase and sale certificate of agricultural products that he supplied rice 80 km 12 cm to the kindergarten * in May of each year from 2005 to 2007, the testimony of the witness of this court seems to be hard to prove that the plaintiff's testimony of "direct cultivation" or "self-production" is hard to have objective or direct probative value (in particular, referring to neighboring 200 to 350 meters of farmland and testimony of the witness of this court is insufficient to prove that the plaintiff made it difficult for the plaintiff's testimony from the empirical rule to the extent that the plaintiff made it difficult to use the farmland due to the difference between the neighbor and the distance of 350 meters).

D)Therefore, the above evidence submitted by the plaintiff alone can be deemed to have proved that the plaintiff was "on a commercial basis" in the cultivation of the farmland at issue or "one half or more of the farming works" by cultivating or cultivating the farmland with his own labor. Therefore, the plaintiff's above assertion based on the premise that the plaintiff cultivated the farmland at issue for eight years is without merit.

3.In conclusion

Thus, the plaintiff's claim of this case is dismissed for reasons.