Seoul Administrative Court 2010Gudan11026 ( October 31, 2011)

Cho High Court Decision 2010Du0082 ( October 24, 2010)

Farmland under the Farmland Act that is not immediately subject to the reduction or exemption of capital gains tax;

There is no evidence to prove that the land was actually used for cultivation at the time of expropriation, and even if it is recognized as farmland under the Farmland Act due to the existence of a building, fraternity, etc. for warehouse use on that part, it is difficult to recognize it as farmland subject to reduction or exemption of capital gains tax, and there is no evidence to prove that it was used

2011Nu8125 Revocation of Disposition of Imposing capital gains tax

XX Kim

O Head of tax office

Seoul Administrative Court Decision 2010Gudan11026 Decided January 31, 2011

June 24, 2011

August 26, 2011

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The imposition of capital gains tax of KRW 49,909,730 against the plaintiff on October 5, 2009 by the defendant shall be revoked.

1. Quotation of judgment of the first instance;

The reasons to be stated in this decision are as follows, except for adding the following judgments with respect to the plaintiff's new argument at the trial, this Court cites it as stated in the reasoning of the judgment of the first instance.

2. Additional determination

A. The plaintiff's assertion

1) Since the building ledger on each of the instant lands pertaining to a building (ware and toilet) on the land of 000-00 is the old ledger which registered a building that does not exist in light of the contents and actual status of the building ledger, the airline margin on the said land, etc., the Defendant’s disposition based thereon is unlawful.

2) The Plaintiff is entitled to receive compensation for fruit trees from the Korea National Housing Corporation at the time of expropriation by cultivating sprink trees on each land of this case. Since the Plaintiff constitutes farmland with fruit trees, it is subject to reduction and exemption of capital gains tax under the Restriction of Special Taxation Act.

3) Farmland under the Restriction of Special Taxation Act and farmland under the Farmland Act should be interpreted as having the same scope. Since the warehouse building and mooring house, etc. among the obstacles in this case fall under the production facilities, etc. for agricultural and livestock products under the farmland law and the site should be considered as farmland, the transfer income tax shall be reduced or exempted against the Plaintiff in accordance with the Restriction of Special Taxation Act.

B. Determination

1) As to the first argument

It is insufficient to conclude that the building ledger of the above building on the land of 00-00 out of each of the land of this case is false, in light of the respective descriptions and images of evidence Nos. 9, 10-1, 2, 14, 17, 18-1, 2, and 10 of evidence No. 12-3, 12-1, 13-2, 14, 18-2, and 18-1 and 2, and there is no other evidence to prove otherwise. Even if the contents of the above building ledger are different from facts as the plaintiff's assertion, it is still insufficient to recognize that the obstacles of this case, including the above building, are owned by the plaintiff or used for regular residence, even if the plaintiff submitted additional evidence at the trial of all of the evidence submitted by the court of first instance, or examined evidence. Therefore, the disposition of this case is legitimate regardless of the authenticity of the above building ledger, the plaintiff's above assertion is without merit.

2) As to the second argument

According to the statements in Eul evidence 2-2, the testimony and arguments of the KimA by the witness Kim Jong-A of the party in question among each of the lands in this case, the plaintiff can recognize the fact that the plaintiff received 1,80,000 won in total from the Korea National Housing Corporation about the 15-year old tree 45-year old tree 1, poppy tree 30-year 30-year 30,000,000 from the land in this case, about the total of 13-year 13-year trees, such as the 13-year old tree 15-year 30,000 old 5-year 8 old 5,000. However, in light of the current status and area of the above land and the distribution of lost trees on the above land, it is insufficient to view the above land as farmland used for the multi-year plant cultivation as provided in Article 2-1 of the Farmland Act, and there is no other evidence to acknowledge this differently (the part falls under the farmland special taxation under the Farmland Act, as it does not necessarily be justified.

3) As to the third argument

In light of the principle of no taxation without law, or the requirements for tax exemption or tax exemption, the interpretation of tax laws shall be interpreted in accordance with the text of the law, unless there are special circumstances. It is not permitted to expand or analogically interpret without reasonable grounds, and in particular, it accords with the principle of fair taxation to strictly interpret that the provision is clearly considered as a preferential provision among the requirements for reduction or exemption (see, e.g., Supreme Court Decision 2010Do1191, Jan. 27, 2011).

Meanwhile, according to Article 2 (3) 2 (b) of the former Enforcement Decree of the Farmland Act (amended by Presidential Decree No. 21848 of Nov. 26, 2009), a stable site installed in the land actually used for cultivating crops shall be deemed farmland. However, according to Article 27 (1) of the Enforcement Rule of the Restriction of Special Taxation Act, the land used for actual farming regardless of the land category on the public register as farmland is deemed as farmland and the site for stables is not clearly included in the scope of farmland by stipulating that the land used for actual farming is included in farming clubs, composts, composts, pumping stations, swamps, swamps, and waterways, which are directly necessary for farmland management. Furthermore, even in accordance with Article 2 (3) 2 (b) of the former Enforcement Decree of the Farmland Act, the Restriction of Special Taxation Act, the Enforcement Decree of the Restriction of Special Taxation Act, and the Enforcement Decree and the Enforcement Rule of the Enforcement Rule thereof, the site of a stable site is not recognized as farmland.

In accordance with the above legal principles and relevant statutes, this case shall be examined. In full view of the testimony by a witness KimA, evidence No. 14 through evidence No. 18, evidence No. 18, and evidence No. 1 through No. 4 (including each number), the existence of a building and a fraternity used for storage on each of the land of this case, and the fact that the farming materials, farming equipment, etc. were stored in the building of this case is recognized.

However, as seen earlier, although the farmland law recognizes the site of a fraternity as farmland, but the Restriction of Special Taxation Act explicitly prescribes the scope of farmland subject to reduction or exemption of capital gains tax, it does not stipulate that it is included in the scope of farmland. Even if examining the exemplary items included in the scope of farmland under Article 27(1) of the Enforcement Rule of the same Act, it is considerably narrower than farmland stipulated in the farmland law, which is a structure or facility site directly necessary for farmland management. In addition, the principle of strict interpretation of the preferential provision for tax reduction or exemption as seen earlier is not interpreted to include the "agriculture" under Article 27(1) of the Enforcement Rule of the Restriction of Special Taxation Act, among the obstacles in this case, it cannot be interpreted to include the "agriculture, composts, composts, small and medium offices, pumping stations, waterways, etc.", and therefore, it is difficult to recognize the site of a fraternity as farmland subject to reduction or exemption of capital gains tax under the Restriction of Special Taxation Act (in this respect, it cannot be immediately viewed as farmland subject to reduction or exemption of capital gains tax under the Special Taxation Act).

In addition, as seen above, there is no legal basis to recognize the site for a building used as a warehouse such as the storage of farming machinery and tools as farmland in excess of the level of the farming shed, which is simply simple in the dry field near the paddy field for convenient farming building as seen above, and there is no legal ground to recognize the site as farmland for a building used as a warehouse such as storage of farming machinery and tools among the obstacles in this case, it is difficult to recognize that the site for a

Even if there is room to see these domestic warehouse buildings as a farmer, it cannot be concluded that the Plaintiff cannot be deemed as the owner of the above building as seen earlier, and it is difficult to conclude that the farmer, etc. stored in the building was used for cultivating the Plaintiff’s land. In this regard, the said building site part cannot be considered as the reduction or exemption of capital gains tax against the Plaintiff. Ultimately, the Plaintiff’s third assertion cannot be accepted.

3. Conclusion

Therefore, the judgment of the first instance court is legitimate, and it is so decided as per Disposition by the plaintiff's appeal.