Determination as to whether the Plaintiff was directly involved in the instant land for at least eight years;

It is insufficient to recognize the fact that the Plaintiff had been engaged in the cultivation of crops in the instant land on a regular basis or engaged in the cultivation, etc. with his own labor not less than half of the farming work.

Article 66 of the Enforcement Decree of the Restriction of Special Taxation

Cheongju District Court 2016Guhap10744, Revocation of Disposition of Imposing capital gains tax, etc.

○ ○

○ Head of tax office

November 10, 2016

December 15, 2016

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s imposition of capital gains tax of KRW 171,218,10 (including additional taxes) and special rural development tax of KRW 12,716,370 (including additional taxes), capital gains tax of KRW 89,909,560 (including additional taxes) and special rural development tax of KRW 5,645,820 (including additional taxes) for the Plaintiff on November 1, 2015 shall be revoked.

1. Details of the disposition;

A. On November 1, 1988, the Plaintiff acquired respectively 3,322 square meters in the same field, 1,322 square meters in the same field, 1,121 square meters in the same field, 2,076 square meters in the same field, and 883 square meters in the same field on February 13, 1990. On December 24, 201 and on January 13, 2014, the Plaintiff transferred the same land to ○○○○○ (hereinafter collectively referred to as “instant land”).

B. The Plaintiff reported the transfer income tax on the instant land to the Defendant by applying the reduction or exemption of transfer income tax on self-employed farmland prescribed in Article 69 of the former Restriction of Special Taxation Act (amended by Act No. 13560, Dec. 15, 2015; hereinafter the same).

C. However, as a result of the on-site investigation of the above capital gains tax, the Defendant, on the ground that the Plaintiff cannot be deemed to have cultivated the land of this case directly, issued a reduction or exemption of the Plaintiff’s capital gains tax, and on November 1, 2015, the Defendant rendered each disposition of imposition of KRW 171,218,10 (including additional taxes), and KRW 12,716,370 (including additional taxes), and special tax on rural communities, KRW 89,909,560 (including additional taxes), and KRW 5,645,820 (including additional taxes) for the transfer income tax reverted to year 2014 (hereinafter “instant disposition”).

D. The Plaintiff filed a tax appeal with the Tax Tribunal on December 10, 2015, but the said claim was dismissed on February 29, 2016.

[Reasons for Recognition] Facts without dispute, entry in Eul's Evidence Nos. 1 through 3 (including branch numbers, hereinafter the same shall apply) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In light of the fact that even though the plaintiff concurrently served as the representative director of ○○ Stock Company, etc. (hereinafter referred to as “tax company”), the plaintiff actually resided adjacent to the land of this case, and there was sufficient time to cultivate the land of this case, the plaintiff can be deemed to have actually cultivated the land of this case, but the disposition of this case was unlawful on a different premise. Accordingly, the disposition of this case is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

Article 66(13) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 26070, Feb. 3, 2015) provides that “The direct cultivation means that a resident is engaged in cultivating crops or growing perennial plants on his/her own farmland at least 1/2 of the farming works on his/her own labor or cultivating or growing them with his/her own labor” (see, e.g., Supreme Court Decision 94Nu996, Oct. 21, 1994). Meanwhile, the fact that the land transferred as a requirement for reduction or exemption of capital gains tax has to be proved by the transferor who asserts it (see Supreme Court Decision 94Nu996, Oct. 21, 194).

In light of the above legal principles and relevant Acts and subordinate statutes, as to whether the Plaintiff cultivated the instant land directly for at least eight years, the following circumstances acknowledged by the overall purport of statement and pleading evidence Nos. 9, 3 through 5, namely, ① the Plaintiff managed and operated the said company as the largest shareholder and representative director of the taxi company, and continued to have earned income in the year 2006, including that there was a maximum of 48,800,000 won of earned income. The Plaintiff was staying abroad from around 1997 to around 276, while working as the vice-chairperson and members of the Art General Meeting and the members, and the Plaintiff did not appear to have been able to have been able to recognize the Plaintiff’s direct payment of the instant land for at least half of the farming work with his own labor during 1941 income activities, etc. The Plaintiff’s assertion that the Plaintiff had no other reasons to recognize that the Plaintiff had been directly engaged in the farming and management of the instant land under the name of the Plaintiff, including the reduction or exemption of the agricultural capital gains tax.

3. Conclusion

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