Cho High Court Decision 2008Da1354 (Law No. 28, 2008)

Even if a land was acquired prior to the designation of a land scheduled for replotting, it constitutes a non-business land

Even if a land substitution plan is authorized due to a land readjustment project, the postponement of the project period for a land readjustment project shall not be regarded as a non-business land due to the change of urban planning.

The contents of the decision shall be the same as attached.

Article 104 (Tax Rate of Transfer Income Tax of the Gu)

Article 104-3 (Scope of Land for Non-business Use)

1. The part of the Defendant’s disposition imposing capital gains tax of KRW 56,893,780 for the Plaintiff on March 3, 2008 exceeds KRW 11,670,813 for the Plaintiff.

2. One-fifth of the costs of lawsuit shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

The Defendant’s disposition of imposition of capital gains tax of KRW 56,893,780 for the Plaintiff on March 3, 2008 shall be revoked.

1. Details of the disposition;

가. 원고는 2003. 5. 22. 창원시 ◆동 375-2 답 4,249㎡에 관한 공유지분 42490분의 3899.7(이하 '이 사건 토지'라 한다)을 매수하고 2003. 6. 23. 그에 관한 지분이전등기를 마쳤다

나. 원고는 2007. 5. 2. 이 사건 토지를 최☆☆, 김★★, 김○○, 황●●, 기◎◎에게 양도하고 2007. 6. 22. 위 사람들 명의로 지분이전등기를 마쳐준 다음, 2007. 8. 31. 피고에게 일반누진세율을 적용하여 산출한 2007년 귀속 양도소득세 23,341,610원 중 분납분 11,670,800원을 신고ㆍ납부하였다.

C. The Defendant: (a) deemed that the instant land constitutes land for non-business under Article 104-3 of the former Income Tax Act (amended by Act No. 8911 of March 21, 2008; hereinafter “Income Tax Act”); (b) calculated capital gains tax again by applying 60% heavy tax rate; (c) on March 7, 2008, notified the Plaintiff of KRW 56,893,780 of capital gains tax for the year 2007 (hereinafter “instant disposition”).

D. The Plaintiff dissatisfied with the instant disposition and filed a tax appeal with the Tax Tribunal on April 10, 2008, but the Tax Tribunal dismissed the Plaintiff’s claim on August 28, 2008.

[Ground of recognition] Facts without dispute, Gap evidence 1, Eul evidence 2-1, Eul evidence 1-2, Eul evidence 1-2, Eul evidence 8, Eul evidence 1-3, the purport of the whole pleadings and arguments

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff asserts that since the plaintiff acquired the land in this case after the plaintiff acquired the land in this case and the execution plan of the land readjustment project was restricted in land use and disposal, the land in this case shall not be regarded as non-business land during the period in which the cause occurred as it falls under the land not used for the business due to justifiable reasons, such as the alteration of urban planning, in addition to the reasons in subparagraphs 1 through 11 after acquiring the land in this case under Article 168-14 (2) of the Enforcement Decree of the Income Tax Act and Article 83-5 (1) 12 of the Enforcement Rule of the Income Tax Act, and the period in which the cause occurred shall not be regarded as the land for non-business use.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) From around around 1968, Nonparty Kim Jong-chul had cultivated Nauri in the instant land.

(2) On December 21, 199, the Gyeongnam-do announced a new city planning (publically amended) partial decision (publically amended) by No. 1999-316 of the Gyeongnam-do’s notification. Accordingly, the land in this case was changed to a general residential area.

(3) 경상남도지사는 2001. 7. 18. 토지의 효용증진 및 공공시설 설치를 위해 경상남도 공고 제2001-313호로 창원시 ◆동, 서상동, 팔용동, 반계동 일원 396,076㎡에 대한 창원 ◆동지구 토지구획정리사업(이하 '이 사건 토지구획정리사업'이라 한다)의 사업시행을 인가하고 이를 공고하였는데 당시 공고된 사업기간은 2004. 7. 17.까지였다.

(4) On September 19, 2002, the Gyeongnam-do governor approved the land readjustment and rearrangement project of this case (designation of planned land) under Article 2001-313 of the Ministry of Land, Infrastructure and Transport’s notification.

(5) The Plaintiff purchased the land of this case on May 22, 2003 and completed the registration of transfer of shares on June 23, 2003.

(6) As the designation of the land as a planned land substitution for the instant land was no longer possible, Kim Jong-chul was 45,867,950 won as the actual farming compensation from Changwon-si on July 29, 2003.

(7) On November 5, 2004, the Gyeongnam-do governor approved the modification of the project plan (the extension of the period) to extend the project period of the land readjustment project of this case for one year from July 18, 2001 to July 17, 2005 on the ground that the compensation consultation and the delay in removing obstacles was made under Article 204-563 of the Gyeongnam-do Public Notice of November 5, 2004, and approved the modification of the project plan (the extension of the period) to extend the project period of the land readjustment project of this case for one year from July 18, 2001 to July 17, 2005. On June 29, 2005, the Gyeongnam-do public notice of the delay in compensation for losses and the lack of project period to implement administrative procedures (land substitution disposition and authorization, etc.) for five years from July 18, 2001 to December 31, 2008.

(8) 원고는 이 사건 토지를 취득한 지 4년이 경과한 2007. 6. 22. 이 사건 토지를 최☆☆, 김★★, 김○○, 황●●, 기◎◎에게 양도하고 그 명의의 지분이전닫기를 마쳐주었는데, 당시 이 사건 토지에 대한 환지처분의 공고는 없었다.

(9) The instant land is designated as a Class 2 general residential area and a quasi-residential area pursuant to the National Land Planning and Utilization Act.

[Reasons for Recognition] Facts without dispute, Eul evidence Nos. 2, Eul evidence Nos. 3-1 through 3, Eul evidence Nos. 4 through 6, 8 through 11, Eul evidence No. 13-3, and the purport of the whole pleadings

D. Determination

(1) The term "period prescribed by the Presidential Decree" in each item of subparagraph 2 of Article 168-6 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 20618, Feb. 22, 2008; hereinafter referred to as the "Enforcement Decree of the Income Tax Act") means the period exceeding the period calculated by subtracting three years from the possession period of land; ② the period exceeding one year from the possession period of land; ③ the period exceeding one year from the three years immediately before the transfer date; ③ the period equivalent to 20/100 of the possession period of land; and ③ the period equivalent to 20/100 of the possession period of land.

(2) In addition, Article 104-3 (2) of the Income Tax Act provides that the land for non-business use may not be deemed land for non-business use due to the prohibition of the use of the land by the provisions of law after the acquisition of the land or other inevitable reasons prescribed by the Presidential Decree. Accordingly, Article 168-14 (1) 3 of the Enforcement Decree of the Income Tax Act and Article 83-5 (1) 12 of the former Enforcement Rule of the Income Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 15 of April 29, 2008; hereinafter referred to as the "Enforcement Rule of the Income Tax Act") provide that the land which is not used for business due to legitimate reasons such as the alteration of urban planning after its acquisition shall be deemed land for non-business use under the provisions of the same paragraph during the period in which the relevant reason occurs,

(3) In light of the above relevant Acts and subordinate statutes, in order to fall under the land for non-business as farmland in the urban area under the Income Tax Act, the period corresponding to the farmland in the urban area exceeds the period calculated by subtracting three years from the land ownership period, ② the period exceeding one year from the three years immediately before the transfer date, ③ the period exceeding one year from the three years immediately before the transfer date, and ③ the period equivalent to 20/100 of the land ownership period. However, if the land in this case was not used for business due to inevitable reasons, such as alteration of urban planning after the Plaintiff acquired the land in this case, it shall be deemed that the land does not fall under the farmland in the urban area, and it shall be determined whether it constitutes the land for non-business use.

(4) As to this, the Defendant asserted that Article 104-3 (2) of the Income Tax Act is not applicable since the land in the urban area under Article 104-3 (1) 1 (b) of the Income Tax Act falls under the land for non-business use after two years have elapsed from the date of transfer incorporated into the urban area as of the date of transfer. However, it is difficult to accept because it exceeds

(5) However, since the project period of the land rearrangement project of this case was extended twice after the Plaintiff acquired the land of this case, about four years and five months increased, as seen above, although the land rearrangement project of this case was authorized on September 19, 202 before the Plaintiff acquired the land of this case, the following circumstances, which are acknowledged by considering the facts of the above recognition and the overall purport of argument, i.e., the extension of the project period of the land rearrangement project of this case, falls under the alteration of urban planning as stipulated in Article 168-14 (1) 3 of the Enforcement Decree of the Income Tax Act, Article 83-5 (1) 12 of the Enforcement Rule of the Income Tax Act, and Article 83-1 (2) of the Enforcement Decree of the Income Tax Act, since the land of this case cannot be seen as falling under the change of urban planning as falling under the non-business land of this case, the land of this case, which cannot be seen as falling under the change of the land of Article 8-1 of the Enforcement Rule of the Income Tax Act.

(6) Accordingly, the instant disposition, which reported the instant land to non-business land, is in accordance with the above law.

(e) The due amount of transfer income tax;

According to the transfer income tax rate prescribed in Article 104 (1) 1 of the Income Tax Act, when the transfer income tax of the land of this case is calculated again, the total determined tax amount shall be 23,341,613 won, as stated in the “reasonable tax amount” column in the annexed tax calculation sheet. Here, when the Plaintiff deducts the tax amount of 11,670,80 won, the tax amount to be paid by the Plaintiff shall be 11,670,813 won (=23,341,613 - 11,670,800 won).

3. Conclusion

Therefore, the plaintiff's claim of this case is justified within the scope of the above recognition, and the remaining claim is dismissed as it is without merit. It is so decided as per Disposition.