early 2009Gu3007 ( October 12, 2009)

Reduction of or exemption from capital gains tax for farmland substitute land

It is reasonable to deem that the actual cultivator is a person who received a request for cultivation from the Plaintiff by deeming that business income and earned income accrue for the period alleged to have cultivated by the Plaintiff.

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

Park ○

Head of the Gu Tax Office

1. The plaintiff's claim is dismissed.

2. The plaintiff shall bear the litigation costs.

The Defendant’s disposition of imposition of capital gains tax of KRW 221,781,170 for the Plaintiff on May 1, 2009 shall be revoked.

1. Details of the disposition;

A. On June 10, 2002, the Plaintiff acquired ○○○○○○, ○○○, and 6,852 square meters prior to two parcels of land (hereinafter “instant farmland”). On August 28, 2007, the Plaintiff acquired and transferred the instant farmland on August 28, 2007. On January 31, 2008, the Plaintiff acquired 321-2 △△△△△△△, 3,689 square meters (hereinafter “the instant substitute farmland”).

B. On October 25, 2007, the Plaintiff filed an application for reduction or exemption of capital gains tax due to farmland substitute land when filing a preliminary return on the tax base of capital gains tax of the farmland in this case.

C. However, the Defendant: (a) deemed that the Plaintiff did not own the farmland in this case; (b) excluded the Plaintiff from applying for reduction or exemption of capital gains tax; and (c) reported the transfer of the farmland in this case to the Plaintiff on May 1, 2009 on the transfer of land for non-business use; and (d) corrected and notified the Plaintiff of KRW 21,781,170 for capital gains tax for the year 2007 (hereinafter “instant disposition”).

D. The Plaintiff appealed and filed an appeal with the Tax Tribunal on July 31, 2009, but the Plaintiff’s claim was dismissed on October 12, 2009.

[Ground of recognition] Facts without dispute, Gap evidence 1, 9 through 13, Eul evidence 1 (including branch numbers; hereinafter the same shall apply) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

After purchasing the farmland of this case, the Plaintiff sought advice on the overall method of farming and fishing village and received some assistance from thisA during the farming season, which is a neighboring resident of this case, due to lack of farming experience. However, this is true that the Plaintiff was able to directly cultivate the farmland of this case, not entirely delegated the farming and fishing village to thisA, but was able to directly cultivate the farmland of this case. Thus, the disposition of this case under the premise that the Plaintiff did not directly cultivate the farmland of this case and substitute farmland of this case was unlawful.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Article 70(1) of the former Restriction of Special Taxation Act (amended by Act No. 921 of Jan. 1, 2010) and Article 67 of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 20620 of Feb. 22, 2008) provide that the reduction or exemption of capital gains tax on the substitute land for farmland shall be reduced by 100/100 of capital gains tax on the land that a resident directly cultivates while residing in the location, etc. of the previous farmland for not less than three years, namely, he/she engages in cultivating crops or growing perennial plants on his/her own farmland or growing or growing more than half of farming works on his/her own labor, and that is generated from substitute land for other farmland within one year from the date of transfer of the previous farmland due to necessity for cultivation.

(2) Comprehensively taking account of the purport of the arguments in Gap evidence 2, 3, and Eul evidence 2, it is difficult for this case to find that this case's farmland had been produced with all farming machinery from March 6, 2009 to transfer from March 6, 2007, and as a result, from 450,000 to 50,000 won were paid to public officials investigating the same day, this case's testimony was made to 50,000 won to 40,000 won. The plaintiff also stated that this case's testimony was made to 50,000 won and 50,000 won and 40,000 won and 50,000 won and 50,000 won and 50,000 won and 10,000 won and 30,000 won and 27,00,000 won and 5,000 won and 27,000.

(3) Therefore, the disposition of this case is legitimate since the Plaintiff cannot be deemed to have been engaged in the cultivation of crops for not less than three years in the farmland of this case or cultivated or cultivated not less than half of the farming work with his own labor. The Plaintiff’s above assertion is without merit without any need to further examine who is the actual farmer of the substitute farmland of this case.

3. Conclusion

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