National Tax Service Review Transfer 2010-0310 ( December 29, 2010)

Farmland shall not be deemed farmland used as a stable site as of the date of transfer;

Even if land on the public register is farmland, it shall not be deemed farmland that is not used for actual cultivation as of the date of transfer and used as a stable site, and it shall not be deemed land subject to reduction or exemption of capital gains tax, and it shall not be deemed temporary suspension due to seasonal reasons

2010Guhap4709 Disposition of revocation of reduction or correction of capital gains tax

IsaA

Head of the High Tax Office

March 29, 2011

May 17, 2011

1. The plaintiff's claim is dismissed.

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

The defendant's rejection disposition against the plaintiff on September 30, 2010 against the plaintiff shall be revoked for the reduction of 118,626, and 460 won as of September 30, 209.

1. Details of the disposition;

A. On December 1, 1983, the Plaintiff acquired on December 19, 2083, and transferred the land of this case to Gyeonggi-do on May 31, 2009, the Plaintiff made a preliminary return and payment of capital gains tax by using the amount of capital gains tax to be paid voluntarily as KRW 511,139,97, and capital gains tax to be paid voluntarily, as KRW 118,626460, the same amount of 00,00 and KRW 627,00.

B. On July 30, 2010, the Plaintiff filed a request for correction against the Defendant for reduction of 118,626, and 460 won of the transferred income tax already paid pursuant to Article 69(1) of the former Restriction of Special Taxation Act (amended by Act No. 9763, Jun. 9, 2009; hereinafter “former Restriction of Special Taxation Act”) on the premise that the instant land constitutes one of its own farmland for at least eight years.

C. On September 30, 2010, the defendant issued a disposition rejecting the plaintiff's claim for correction on the ground that "the land of this case was used as a stable site from September 2007 to March 2009, which is the time of transfer, it cannot be viewed as farmland, and it cannot be viewed as a temporary suspension of business."

D. On October 25, 2010, the Plaintiff dissatisfied with the instant disposition and caused a request for examination to the Commissioner of the National Tax Service on October 25, 2010, and the Commissioner of the National Tax Service dismissed the Plaintiff’s request on December 29, 2010.

[Reasons for Recognition] Unsatisfy, Gap evidence 10-1 to 6, Gap evidence 11-1 to 18, Gap evidence 12, 13-1, 2, Gap evidence 19, Gap evidence 20-1, 2, Eul evidence 1-2, Eul evidence 1-3, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Since the land of this case was used as a stable site from September 2007 to March 19, 2009, which is the time of transfer, or since agricultural and livestock products production facilities, such as stables, etc. under the Farmland Act, should also be included in farmland, the land of this case should be deemed farmland. Even if the site for domestic livestock pens cannot be viewed as farmland, the Plaintiff cultivated crops, such as rice, rice, fry, etc. for about 23 years and 10 months from the acquisition of the land of this case from December 1, 1983 to September 2007, and formed livestock pens, etc. to grow again as farmland that can grow as farmland as a result of the expropriation of the land of this case on March 19, 2009, the land of this case should also be deemed as farmland because it is merely a temporary change in the phenomenon of farmland.

B. Relevant statutes

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

C. Determination

(1) According to Article 69(1) of the former Restriction of Special Taxation Act, Article 66(5) and (13) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 21545, Jun. 19, 2009); Article 27 of the former Enforcement Rule of the Restriction of Special Taxation (amended by Ordinance of the Ministry of Strategy and Finance No. 96, Aug. 28, 2009) and other relevant Acts and subordinate statutes, the Plaintiff shall continue to cultivate the pertinent land for at least eight years at the location of the land in order for the Plaintiff to be exempted from capital gains tax due to the transfer of the instant land (see, e.g., Supreme Court Decision 98Da164, Jun. 19, 200). The land must be farmland as of the date of transfer. The land must be actually used for farming regardless of its land category on the public register, referring to the land which is not subject to exemption from capital gains tax on the said farmland, i.e., 20., or 9 of farmland.

(2) As to the instant case, there is no dispute between the parties as to the fact that the land of this case was used as a stable site from September 2007 to March 19, 2009, which was the date of the transfer from September 2007. Thus, the instant land used as a stable site as of the date of the first day of first instance, and is not used for the cultivation of crops or the cultivation of perennial plants, not as farmland. Furthermore, the period of installation of stables on the instant land from September 2007 to March 2009 cannot be deemed as a temporary resting situation due to seasonal reasons. Accordingly, the Plaintiff’s above assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.