Transfer-2015-0179 (2016.04.04)

It is difficult to see as being a serious one for 8 years.

The plaintiff asserted that he cultivated the land No. 1 of this case and the land No. 2 of this case for not less than 8 years, but there is no other evidence to acknowledge it. Thus, the disposition that does not meet the requirements for reduction and exemption of self-farmland is legitimate.

Article 69 of the Restriction of Special Taxation Act (Abatement or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

2016Guhap51786 Revocation of Disposition of Imposing capital gains tax

AA

BB

May 30, 2017

June 13, 2017

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of capital gains tax for the year 2013 against the Plaintiff on August 1, 2015 (the date of disposition is August 1, 2015 according to the entry of the notice of tax payment (Evidence A)).

1. Details of the disposition;

A. On July 2, 2004, the Plaintiff acquired 1/2 shares out of 1154 Doz. 1154 Doz. 2,370 Doz. (hereinafter “instant land”) and transferred on October 22, 2013. On December 9, 2005, the Plaintiff acquired Doz. 1799-3 Doz. Maz. 1799-3 Maz. 1764 m2,964 m. (hereinafter “the instant land”) and transferred on December 10, 2013.

B. On December 20, 2013, the Plaintiff made a preliminary return on capital gains tax by deeming that Article 69 of the Restriction of Special Taxation Act on Self-Cultivating Farmland applies to the Defendant with respect to capital gains from each of the above land, on the grounds that the capital gains tax is fully reduced or exempted.

C. The Defendant deemed that the Plaintiff did not cultivate the instant land for not less than eight years from the date of acquisition, and that the Plaintiff did not cultivate at least 1/2 of the instant land with its own labor, and excluded the application of the said reduction and exemption provisions by deeming that the Plaintiff did not cultivate at least 1/2 of the farming work with its own labor, and determined and notified the Plaintiff of KRW 00,000,000 for the transfer income tax corresponding to the year 2013 (hereinafter “instant disposition”).

D. The Plaintiff appealed and filed a request for pre-assessment review on July 2, 2015 and filed an objection on September 30, 2015, but was dismissed on April 4, 2016.

[Ground of recognition] Gap evidence 1 to 5 (including branch numbers for those with branch numbers), Eul evidence 1, the purport of the whole pleadings

2. Relevant statutes;

It is as shown in the attached Form.

3. The assertion and judgment

A. The plaintiff's assertion

1) The Plaintiff, for more than eight years after acquiring the instant land No. 1.

2) The meaning of "direct cultivation" under the Restriction of Special Taxation Act should be interpreted as investing one-half or more of its own labor force in the remaining work except for mechanization work. Since the Plaintiff was directly engaged in the remaining farming work except for mechanization work for not less than eight years after acquiring the instant land, it shall be deemed that the Plaintiff "direct cultivation of the instant land 2."

Therefore, the disposition of this case, which did not apply the capital gains tax reduction and exemption provisions, is unlawful, considering that the Plaintiff did not own land Nos. 1 and 2 of this case.

B. Legal principles

The burden of proving the fact, etc. of direct cultivation of the land transferred as the requirement for reduction or exemption of capital gains tax on self-arable land is against a taxpayer who asserts reduction or exemption of capital gains tax (see, e.g., Supreme Court Decision 2002Du7074, Nov. 22, 2002). Meanwhile, the interpretation of tax law should be interpreted in accordance with the legal text unless there are special circumstances, and the interpretation of tax law should not be extensively interpreted or analogically interpreted without reasonable grounds. In particular, it is consistent with the principle of fair taxation to strictly interpret that the provision clearly deeming the provision as a provision of preferential treatment in the provision of requirements for reduction or exemption is in line with the principle of fair taxation (see, e.g., Supreme Court Decision 2003Du7392, May 28, 2004). The "direct cultivation" under the Restriction of Special Taxation Act means that a resident is engaged in the cultivation of crops or the growing of perennial plants, or is engaged in the cultivation or cultivation by one-2 or more works with his own labor.

C. Determination as to the legitimacy of the part concerning the transfer of the instant land No. 1 among the instant disposition

In full view of the following facts: (a) whether the Plaintiff has cultivated the land of this case for at least eight years; (b) the Plaintiff’s statement in the certificate of cultivation of the land of this case (Evidence No. 11-1 of the evidence No. 11-1 of the evidence No. 11-2 of this case); (c) the witness Kim Jong-Un’s testimony in this court’s request for delivery of documents with respect to the land information of this case and the whole purport of pleadings, it can be acknowledged that the Plaintiff became a site for the land of this case; and (b) the Plaintiff’s assertion that the land of this case was cultivated in the land of this case for the above period from the pre-taxation review stage to the litigation of this case; and (d) the Plaintiff did not submit any objective evidence as to the operation of the Plaintiff, shoulder, and pop-up tree of this case for the above period; and (e) the witness Kim Jong-il’s testimony is likely to be trusted; and (e) the Plaintiff’s assertion that this part of this case’s land of this case’s evidence No. 8 through No. 108-14 of this case is insufficient.

D. Determination as to the legitimacy of the part concerning the transfer of the land No. 2 in the instant disposition

1) In light of the legal principles as seen earlier, there is no ground to interpret the meaning of "direct cultivation" under Article 69 of the Restriction of Special Taxation Act as an input of one-half or more of its own labor force during the farming work except the mechanization work. Therefore, it is subject to determination as to whether the Plaintiff inputs one-half or more of the entire farming work in accordance with the legal provisions.

2) According to the overall purport of evidence No. 5-2, No. 5-2, and No. 3 as to whether the Plaintiff directly cultivated the land No. 2 of this case, according to the following purport: CCC from 2003 to 2009; DDR takes charge of agricultural machinery operation, such as dynasation, religion, harvest, etc. from 2010; the Plaintiff’s spouse took part of CCC’s work, such as fynasation, etc.; and the Plaintiff’s employee stated that there was no agricultural machinery owned by the Defendant except for one pesticide spraying (Evidence No. 5-2, No. 10). Thus, it is reasonable to view that most of CCC and DDR, which possess agricultural machinery, were entrusted by the Plaintiff during the cultivation work of the land No. 2 of this case, and part of the Plaintiff’s spouse took part of the work.

Therefore, it is insufficient to recognize that the Plaintiff had been engaged in the cultivation of the instant land No. 2 for eight years after the acquisition of the instant land, or cultivated with his own labor not less than half of the farming work after the acquisition of the instant land, and there is no other evidence to acknowledge otherwise. Accordingly, the Plaintiff’s assertion on this part is without merit.

4. Conclusion

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