Whether capital gains tax exemption is applied by substitute land for farmland

If substitute farmland is acquired and previous farmland is transferred for public works within three years, non-taxation provisions on capital gains tax by substitute land of farmland may not be applied.

1. The request is dismissed.

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

The Defendant’s disposition imposing capital gains tax of KRW 52,583,920 on the Plaintiff on April 8, 205 is revoked.

1. 원고가 2003. 5. 12. ΟΟΟ도 ΟΟ시 ΟΟ면 ΟΟ리 714-10번지 외 2필지 2,453㎡(′이 사건 토지′라고 한다)를 취득하여 자경하다가 2005. 11. 1. ΟΟΟ도에 공익사업용으로 협의양도하고, 그 대토로 2004. 12. 1. 과 2005. 2. 7. ΟΟΟ도 ΟΟ시 ΟΟ동 293-1번지 외 4필지 4,463㎡와 ΟΟΟ도 ΟΟ시 ΟΟ면 308번지 1,324㎡(′취득 토지′라고 한다)를 취득하였음에 대하여, 피고는 2006. 4. 8. 이 사건 토지의 양도소득이 별지기재 소득세법 제89조 제4항과 그 시행령 제153조 제2항, 제5항의 "농지의 대토로 발생하는 소득"에 해당하지 않는다고 판단하고 그 비과세 규정을 적용하지 않은 채 원고에게 2004년 귀속 양도소득세 52,583,920원을 부과하였다.

2. Accordingly, the plaintiff argues that since the land of this case was transferred for public works within 3 years after its acquisition, it is included in the "large-to-land farmland" under Article 153 (5) of the Enforcement Decree of the Income Tax Act, the "large-to-land farmland" includes only the "acquisitioned farmland", and the "transfered farmland" does not include the "transfered farmland", and the disposition of this case without applying the non-taxation provisions is unlawful. Thus, the relevant laws and regulations are as shown in the separate sheet. Thus, the transfer of the land of this case should not be the land of this case to be subject to non-taxation of capital gains tax under Article 89 (4) of the Income Tax Act, not the land of this case, but the land acquired by the large-to-land is purchased by consultation and expropriated under the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor, and there is no

3. If so, the plaintiff's claim is without merit and it is so decided as per Disposition.

Related statutes

Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005)

Article 89 (Non-Taxable Transfer Income Tax) No income tax shall be levied on any of the following incomes (hereinafter referred to as “transfer income tax”):

4. Income accruing from substituted land for farmland falling under such cases as prescribed by the Presidential Decree.

Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19010 of August 19, 2005)

Article 153 (Non-taxation for Farmland) (2) The term “cases as prescribed by the Presidential Decree” in subparagraph 4 of Article 89 of the Act means the farmland which is substituted for cultivation (excluding the farmland falling under any of subparagraphs of paragraph (4)), and meets the requirements falling under any of the following subparagraphs:

1. Where a person, who resided in a location of previous farmland for not less than three years and acquired another farmland within one year from the date of transfer of previous farmland, has cultivated it while residing in a new location of farmland for not less than three years, or has cultivated the newly acquired farmland while residing in a new location of farmland for not less than three years, within one year from the date of acquisition of new farmland; and

2. Where the area of new farmland to be acquired is not less than the area of farmland to be transferred or the value thereof is not less than a half of the value of farmland transferred.

(5) In applying the provisions of paragraphs (1) 3 and (2) 1, where a purchase by consultation or expropriation under the Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor, or where a expropriation is made under other Acts within three years after a new farmland is acquired, it shall be deemed that he/she has cultivated while residing in the location of farmland for three