National Tax Service Review and Transfer 2011-0106 ( October 27, 2011)

It is difficult to recognize that not less than 1/2 of the transferred farmland has been cultivated with his own labor for not less than 8 years;

In light of the fact that it is difficult to recognize that a person carried out a real estate rental business after discharge and fails to submit objective data related to the progress of the person, even though he/she owns a considerable amount of farmland in addition to the transferred farmland, it is difficult to recognize that he/she carried out a real estate rental business at the same time with his/her own labor;

Article 69 of the Restriction of Special Taxation Act

2011Guhap10691 Revocation of Disposition of Imposing capital gains tax

Park AA

Head of Pyeongtaek Tax Office

June 8, 2012

July 6, 2012

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 of KRW 000 for the year 2009 against the Plaintiff on March 1, 201 is revoked.

1. Details of the disposition;

A. On October 1, 1997 and September 13, 1999, the Plaintiff acquired and owned 000 O2,926 m2, and 3,402 m2 m2 (hereinafter “the farmland in this case”) of the same m3,400 m2 (hereinafter “the farmland in this case”) and transferred the land for public use to the Korea Land Corporation on June 22, 2009.

B. On August 25, 2009, the Plaintiff filed a preliminary return on the tax base of capital gains tax following the transfer of the farmland in this case to the Defendant on August 25, 2009, and constitutes “farmland directly cultivated for not less than eight years” under Article 69(1) of the former Special Taxation Restriction Act (amended by Act No. 9921, Jan. 1, 2010; hereinafter the same shall apply) and applied for reduction of KRW 000 in accordance with the ceiling of capital gains tax reduction by taxable period

C. However, the Defendant excluded the application of Article 69(1) of the former Restriction of Special Taxation Act by deeming that the Plaintiff did not own the farmland of this case for at least eight years as a result of the field investigation of capital gains tax, and issued a notice of correction and notification to the Plaintiff on March 1, 201, of capital gains tax of 009 (including additional tax) for the transfer income tax of 2009 (hereinafter “instant disposition”).

D. On April 7, 2011, the Plaintiff appealed against the instant disposition and filed a request for a trial with the Commissioner of the National Tax Service, but was dismissed on June 27, 2011.

[Grounds for Recognition] The non-speed facts, Gap evidence 2 and 3, evidence 1 and 2, and evidence 1 and 2, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff, as well as the time when he maintained the status of military personnel, was ordered to receive vocational guidance education on April 2, 2001, and did not work at the military unit on June 22, 2009, and was actually cultivated directly for not less than eight years until he transferred the farmland of this case to the Korea Land Corporation. However, the defendant's disposition of this case on the different premise is unlawful.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

(1) As to the meaning of direct cultivation under Article 69(1) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 23590, Feb. 2, 2012), Article 66(13) of the former Enforcement Decree of the Restriction of Special Taxation (amended by Presidential Decree No. 23590, Feb. 2, 2012) clearly provides that "a resident is engaged in the cultivation of crops or the growing of perennial plants on his/her own land or in the growing or growing of perennial plants with his/her own labor", and the court should interpret the meaning of "not less than 1/2 of his/her own labor" and determine whether he/she has cultivated the farmland directly, and such farmland must be proved by the claimant (see, e.g., Supreme Court Decisions 94Nu996, Oct. 21, 194; 2010Du8423, Sept. 30, 2010).

(2) There are evidence as shown by the Plaintiff that he directly cultivated the farmland of this case, and evidence Nos. 4 and 5, evidence Nos. 6-1 through 3, evidence Nos. 7 through 9, evidence No. 10-1 through 26, evidence No. 28, and evidence No. 29, and evidence No. 29, and evidence No. 3 through 7, and evidence No. 29, and evidence No. 8 years after considering the whole purport of the pleadings, it is difficult to find that the Plaintiff cultivated not less than 1/2 of the farming work of this case with its own labor for not less than 8 years at the time of transfer of the farmland of this case, and there is no other evidence to find otherwise.

(A) It is difficult to recognize that the Plaintiff served in the Army from February 22, 1982, and served in the Army on March 31, 2002, while serving in the military, and served in the military concurrently with the work of a farmer while inserting his own labor at the same time. Even if the Plaintiff was selected as a person for vocational reporting education from April 2, 2001 to March 30, 2002, and even if the Plaintiff did not work in the military during the education period and all kinds of education for employment were provided, there is no evidence that the Plaintiff actually received return to farming or provided on-the-job training.

(C) From 2003 to 2009, the Plaintiff had been engaged in real estate rental business under the trade name of GG housing construction, etc., which occurred due to that reason, including KRW 000 in 2003, KRW 00 in 2004, KRW 000 in 2005, KRW 000 in 2006, KRW 000 in 2006, and KRW 000 in 2007, and KRW 000 in 2008, and KRW 000 in 2009.

(D) In addition to the farmland in this case, the Plaintiff owned a considerable amount of farmland from 000 square meters to 29,550 square meters in total, other than the land in this case, the Plaintiff did not submit objective data on the yield or sales details in the farmland in this case corresponding thereto.

(E) On July 5, 1999 with respect to the entire farmland including the farmland in this case, the farmland ledger was first prepared by the Plaintiff’s farmer, and the Plaintiff’s wife H, self-employed, and Park J as its household members, and owned the said farmland, but it is insufficient to recognize that the entry in the farmland ledger alone in light of the size of the entire farmland in this case, the age, occupation, etc. of the household members, including the Plaintiff, has changed the Plaintiff’s own farmland in whole.

(F) From 2004 to 2009, the Plaintiff was registered as a person eligible for direct payments, such as rice income, and received direct payments, but the Act on the Preservation of Rice Income, etc. does not require direct cultivation for the legislative purpose of stabilizing income of farmers, etc. in contrast to the purpose of capital gains tax reduction for self-Cultivating farmland. Therefore, even if direct payments for preserving rice income, etc. were made, “direct cultivation” cannot be presumed to be “direct cultivation.”

(G) The Plaintiff purchased fertilizers and agrochemicals equivalent to the total amount of KRW 000 in the name of the K Agricultural Cooperative from around 2000 to 2008, and purchased fertilizers and agrochemicals in five times from 2006 to 2009, but it is difficult to find out whether the purchase details are about the farmland of this case, and there is no reasonable reason to purchase them in the name of referring to the name of referring.

(h) From May 2007, Park qq, which cultivated ornamental plants in the vicinity of the farmland of this case, testified to the effect that the work force of a person other than the plaintiff was put in more input than that of the plaintiff by giving testimony to the following: (a) the food of the plaintiff was judged daily; and (b) the plaintiff did not regard the plaintiff as autonomous.

(3) Therefore, insofar as it is difficult to recognize that the Plaintiff cultivated not less than 1/2 of the farmland of this case with his own labor for not less than 8 years, it cannot be deemed that the Plaintiff met the requirements for reduction and exemption of capital gains tax due to his own cultivation for 8 years. Therefore, the Defendant’s disposition of this case is lawful.

3. Conclusion

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