Cho High Court Decision 2010Du0549 ( October 30, 2010)

In light of the fact that no special circumstance exists for residing separately from the family members, it shall not be recognized that farmland has been self-covered for at least eight years.

In light of the fact that there was income in the course of other businesses, and there is no special circumstance to reside separately from the foreign wife and the elementary school student's children, etc., it is insufficient to recognize that farmland has been self-filled for not less than eight years. Therefore, a disposition rejecting a request for correction of capital gains tax reduction or exemption is legitimate.

2010Gudan21214 Revocation of Claim for Correction of Transfer Income Tax

Do governor

O Head of tax office

April 19, 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 refusal disposition of correction of capital gains tax against the plaintiff on November 17, 2009 shall be revoked.

1. Details of the disposition;

A. On August 19, 1998, the Plaintiff acquired Dori 808 m2,907 m2 (hereinafter “the instant farmland”).

B. On December 26, 2007, the Plaintiff transferred the farmland of this case to the Plaintiff, and applied the general tax rate (36%) to the land for business, and reported and paid KRW 20,840,490 to the Defendant, but the Defendant deemed the farmland of this case to be the land for non-business use, and notified the Plaintiff of KRW 52,914,540 of the transfer income tax for the year 2007 by applying the heavy tax rate (60%).

C. After that, on September 23, 2009, the Plaintiff filed a claim for correction that the Plaintiff exempted capital gains tax pursuant to Article 69(1) of the former Restriction of Special Taxation Act (amended by Act No. 9921, Jan. 1, 2010; hereinafter the same) while stating that “the Plaintiff has cut down the farmland of this case for not less than eight years,” but the Defendant rejected the claim for correction (hereinafter “instant disposition”) against the Plaintiff on November 17, 2009 on the ground that “the Plaintiff cannot be deemed to have cut down the farmland of this case for not less than eight years.”

[Reasons for Recognition] Facts without dispute, Gap's Class 1 through 3, Eul's Class 1, 2, and 5, and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

"The plaintiff, from April 1, 1998 to the time of transfer of the farmland in this case, had actually resided in the FFri 978-8 or Dadri 820 (hereinafter referred to as "the house in each of the above addresses") which is adjacent to the farmland in this case, for not less than eight years, and the plaintiff's moving of the resident registration to HH-dong 360-12 202 of the Seoul Metropolitan Government HH-dong 360-12 is merely a mere moving for the convenience of the child due to the school's convenience." Accordingly, the disposition in this case is unlawful, even though the transfer income tax should be reduced or exempted by applying Article 69 (1) of the former Restriction of Special Taxation Act.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) According to Article 69(1) of the former Restriction of Special Taxation Act and Article 66(1)1 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 22037, Feb. 18, 2010), where a person residing in a Si/Gun/Gu where farmland is located has cultivated the farmland directly for at least eight years, the amount of tax equivalent to 100/100 of the transfer income tax shall be reduced. Meanwhile, even if the fact that the land has been cultivated as farmland is recognized, the owner is not presumed to be self-sufficient, but the fact that the land has been cultivated as farmland should be proved by the transferor who asserts such fact (see, e.g., Supreme Court Decisions 92Nu1893, Jul. 13, 1993; 94Nu996, Oct. 21, 1994).

(2) In light of the purport of the above evidence, as to whether the Plaintiff had been registered as a resident in the instant house for 8 years or more, the Plaintiff could have acknowledged that the Plaintiff had been registered as a resident in the instant house for 6 years or more from April 1, 1998 to December 1, 2008, by taking into account the following facts: (a) on August 26, 2004, GGH HH-dong 381-JJ JJtel 902; (b) on July 8, 2005, on the ground that (c) on July 8, 2005, the Plaintiff was registered as a resident in the instant house for 6 years or more; (d) on the ground that the Plaintiff had been registered as a resident in the instant house for 15 to 18 years; and (e) on the ground that the Plaintiff did not have any other foreigner’s son’s son’s son’s son 2 and son 4 years or more, the Plaintiff’s son son 1 or son son 4 years.

(3) Therefore, since the Plaintiff failed to meet the application requirements of Article 69(1) of the former Restriction of Special Taxation Act, the instant disposition that reported as above is lawful.

3. Conclusion

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