Daegu High Court 201Nu2676 (Law No. 17, 2012)

Cho High 2010Gu0158 ( October 07, 2010)

It shall not be deemed that at least 1/2 of the farming work has been appropriated with its own labor;

In light of the fact that a pharmacy management and other businesses are conducted together, which are the main business, and the time for which the cultivation of the land can be input cannot be limited, and that family members have cultivated together and employed human beings, it cannot be deemed that they have partially engaged in the cultivation of the land and appropriated 1/2 or more of the farming work with their own labor.

2012Du19700 Revocation of Disposition of Imposing capital gains tax

Quantity XX

Head of the tax office

Daegu High Court Decision 2011Nu2676 Decided August 17, 2012

December 27, 2012

The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Article 69 (1) of the former Restriction of Special Taxation Act (amended by Act No. 9276 of Dec. 29, 2008, hereinafter "the Act") provides that "the tax amount equivalent to 100/100 of the transfer income tax shall be reduced or exempted for the income accruing from the transfer of the land prescribed by the Presidential Decree among the land which is subject to the taxation of agricultural income tax, which is directly cultivated by a resident prescribed by the Presidential Decree who resides in the location of such land for not less than eight years," and Article 66 (12) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 21307 of Feb. 4, 2009, hereinafter "Enforcement Decree of the Restriction of Special Taxation Act") provides that "direct cultivation" means that "the resident engages in the cultivation of agricultural products or the growing of perennial plants on his own land at all times, or cultivates or cultivates with his own labor not less than half of the farming work."

2. A. The lower court: (a) premised on the premise that Article 66(12) of the Enforcement Decree of the Act stipulates the meaning of “direct farming” with the delegation under Article 69(1) of the Act and cannot be deemed as an invalid provision without the basis for delegation; and (b) the meaning of “regular work” and “self-labor force” should be interpreted in accordance with the language and text (see Supreme Court Decision 2010Du8423, Sept. 30, 2010). Based on the same facts acknowledged by its adopted evidence, the lower court determined that the Plaintiff’s land was not subject to a transfer income tax under Article 69(1) of the Act, since the Plaintiff’s family members engaged in the cultivation of the instant land as the principal business together with other businesses, and the time for which the Plaintiff is allowed to input the instant land to cultivate is limited; and (c) the Plaintiff’s family members together engaged in the cultivation and employed the father for this purpose. Therefore, the Plaintiff cannot be deemed to have appropriated 1/2 or more of the work required for the cultivation.

B. Examining the above provisions and related legal principles and records, the above determination by the court below is just, and there is no error of misapprehending the principle of no taxation without the law, Article 69(1) of the Act, and Article 66(12) of the Enforcement Decree of the Act, or the light on the labor force.

3. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.