Daejeon District Court 2014Gudan10032 (No. 30, 2014)

It is reasonable to interpret that the requirement of reduction of capital gains tax for substitute land for three years or more under the Restriction of Special Taxation Act is necessary for not only the period of residence but also the period of cultivation.

Since the cultivation period of the instant land is less than three years and the Plaintiff did not directly cultivate the instant land at the time of the transfer of the instant land, the Plaintiff did not meet the requirements for reduction and exemption of capital gains tax on substitute farmland.

2014Nu10743 Revocation of disposition of imposing capital gains tax

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The director of the tax office

Daejeon District Court Decision 2014Gudan100032 Decided May 30, 2014

August 21, 2014

September 4, 2014

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance court shall be revoked. The defendant's imposition of the capital gains tax 2013 OOOO on November 5, 2013 against the plaintiff and the imposition of the OOOOO of the local income tax 2013 shall be revoked.

1. Details of the disposition;

A. On July 2, 2008, the Plaintiff: (a) acquired each of the instant land on May 14, 2009, 251-11 square meters prior to 251-14,071 square meters prior to 1,071 square meters prior to 251-12 square meters prior to 208 square meters; (b) transferred the instant land to KimB on January 28, 2013.

B. On August 20, 2013, 2013, the Plaintiff (hereinafter referred to as “○○○○○○-gun”) issued 257-3m23m2 (hereinafter referred to as “the Plaintiff”).

The substitute farmland of this case was acquired.

C. On August 25, 2013, the Plaintiff reported the transfer income tax on the instant land to the Defendant, and applied for reduction of 100% of the transfer income tax on the substitute farmland on the ground of the acquisition of the instant substitute farmland.

D. On November 5, 2013, the Defendant denied the reduction or exemption of capital gains tax on farmland substitute land to the Plaintiff, and imposed an OOO (including additional taxes) of capital gains tax in 2013 and OO (OO) of local income tax in 2013 (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 1-2, Gap evidence 2-1-6, Eul evidence 1-2, Eul evidence 1-2, the purport of the whole pleadings

2. Judgment on this safety defense (the part concerning a claim for revocation of imposition of local income tax)

According to Articles 87(1) and 93(1), (2), and (5) of the former Local Tax Act (amended by Act No. 12153, Jan. 1, 2014); when a person liable to pay pro rata income tax files a return, preliminary return, or revised return under the Framework Act on National Taxes or the Income Tax Act, he/she shall file such return, along with the head of the competent tax office in the form prescribed by Ordinance of the Ministry of Strategy and Finance; and pay such pro rata income tax to the head of the competent local government having jurisdiction over the place of tax payment; where the head of the competent local government receives a return, or imposes a tax notice, he/she shall be deemed to have received a return, or imposed a tax notice, if the head of the competent local government files a return, or imposes a tax notice, on the head of the competent local

In light of the relevant legal principles as seen earlier, even if the Defendant, the head of a tax office, imposed and collected OOO of local income tax on the Plaintiff on November 5, 2013, 2013, the tax base of which was the transfer income tax amount in 2013, an appeal suit seeking the revocation of the imposition of local income tax of this case should be filed against the head of the relevant local government, which is the head of the relevant local government. Therefore, the part claiming the revocation of the imposition of local income tax of this case against the Defendant, who is not the rice market, is filed against the non-qualified person, and thus, is unlawful.

3. Judgment on the merits (the part of request for cancellation of imposition of transfer income tax);

A. The plaintiff's assertion

The plaintiff did not know about the land of this case, such as bean and a shoulder, but did not know about it.

The disposition of this case where the Plaintiff transferred the instant land to another person on or around December 2010, but the Plaintiff imposed capital gains tax on the Plaintiff by excluding its application even though the Plaintiff’s acquisition of the instant substitute farmland constitutes the requirements for capital gains tax reduction due to farmland substitute land, on or before January 28, 2013, in order to continue farming. On August 20, 2013, the acquisition of the instant substitute land should continue to exist, and at the time of the transfer, the farmer should not be required at the time of the transfer, and for at least three years.

B. Relevant statutes

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

C. Determination

1) Article 70 of the former Restriction of Special Taxation Act (Amended by Act No. 12173, Jan. 1, 2014);

Article 67 of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 25211, Feb. 21, 2014) provides for the requirements for reduction or exemption of capital gains tax on farmland substitute land. In order to reduce or exempt capital gains tax on income generated from substitute land of farmland pursuant to the said provision, it is required that a person who has resided in the previous location of farmland for at least three years and has been engaged in cultivating crops or growing perennial plants on his/her own land or has cultivated or cultivated 1/2 or more of farming work with his/her own labor (see, e.g., Supreme Court Decision 2011Du20116, Dec. 13, 2011). In addition, the capital gains tax reduction or exemption provision on substitute land of farmland is to protect farmers by allowing and guaranteeing free substitution of farmland, thereby protecting agriculture and promoting the development and encouragement of agriculture. In such cases, the previous land and new land acquired shall be farmland, and the transferor shall be a person who is light at the time of transfer of the previous land (see, etc.

2) In light of the relevant legal principles as seen earlier, the health class, the evidence mentioned above, and the evidence Nos. 3 and 4 as to the instant case

The following circumstances revealed in addition to the purport of the entire pleadings, namely, ① the Plaintiff, even though the Plaintiff was a farmer on the instant land, it was well established in the deaf company to the extent that the pesticide value was not omitted, and in 2011 and 2012, it appears that the said company installed a prefabricated-type panel on the instant land to store earth and sand pipes and other materials. ② Even upon the Plaintiff’s assertion, the Plaintiff’s cultivation period of the instant land is less than three years at the time of the transfer of the land, and the Plaintiff did not directly cultivate the instant land by leasing the instant land to theCC Construction Co., Ltd.; ③ the Plaintiff asserted that the Plaintiff was temporarily suspended farming and leased the instant land to another person because it was difficult to view the Plaintiff’s temporary suspension of cultivation due to the Plaintiff’s lack of farming due to the Plaintiff’s failure to properly cultivate the soil quality of the farmland for cultivation. However, in light of the circumstances leading up to the lease of the instant land, the Plaintiff’s temporary suspension of cultivation of the instant land as well as the installation of the instant land, etc.

3) Therefore, the former tax on the ground that the Plaintiff did not directly cultivate the instant land for at least three years.

The instant disposition that did not apply capital gains tax reduction or exemption provisions for farmland substitute land under the Special Restriction Act and the Enforcement Decree is legitimate, and the Plaintiff’s above assertion is without merit.

4. Conclusion

Thus, the part of the claim for revocation of imposition of local income tax among the lawsuit of this case is unlawful.

The decision of the court of first instance is justified, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition by the assent of all participating Justices on the bench.