The reduction or exemption of capital gains tax shall not apply where a person does not directly cultivate farmland in substitute land.

The plaintiff is residing in the operation of a restaurant on the large farmland and the long distance, and the main revenue and occupation were engaged in a restaurant business other than agricultural management, and they were farmers in the large farmland, but they were not cultivated directly in view of the purpose of acquiring farmland or the current status of cultivation, etc.

Article 70 of the Restriction of Special Taxation Act for Substitute Land for Farmland

2016Guhap52192 Revocation of Disposition of Imposing capital gains tax

IsaA, KimB

00. Head of tax office

April 18, 2017

May 16, 2017

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

Cheong-gu Office

The Defendant’s taxation of each capital gains tax imposed on the Plaintiff on October 0, 2016 is revoked.

1. Details of the disposition;

A. The plaintiffs were owners of 00 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,00.

B. The Plaintiffs filed an application for full reduction or exemption of 00 won of capital gains tax by applying the provision on reduction or exemption of capital gains tax under Article 70(1) of the former Restriction of Special Taxation Act (amended by Act No. 11133, Jan. 1, 201; hereinafter the same) that prescribes reduction or exemption of capital gains tax when reporting the capital gains tax for 200 years following the transfer of the previous farmland of this case, and received the full

C. In around 200, the defendant investigated whether the substitute farmland of this case was directly used for self-defense and decided that the plaintiff did not do so for not less than three years. After denying the previous substitute farmland reduction and exemption and applying the reduction and exemption, the plaintiff notified the plaintiffs on October 00, 200 that each transfer income tax of 00 won and 00 won in total shall be imposed on the plaintiffs, after applying the reduction and exemption.

D. The plaintiffs filed an application for pre-assessment review but dismissed, and the defendant served 00 won of each transfer income tax on October 0, 200 on each of the plaintiff (hereinafter referred to as "each of the dispositions in this case") and filed an appeal with the Tax Tribunal on October 00, 200, but it was dismissed on October 0, 200.

[Ground of recognition] Facts without dispute, Gap evidence 1 to 4, Eul evidence 1 to 3 (including each number), the purport of the whole pleadings

2. Relevant statutes;

It is as shown in the attached Form.

3. Whether the instant disposition is lawful

A. The plaintiffs' assertion

The Plaintiffs have been directly cultivated for three years or more of the farmland in the instant case, and therefore, the previous farmland in the instant case has been cultivated.

Income from the transfer of land constitutes reduction or exemption of capital gains tax due to substitute farmland under Article 70(1) of the former Restriction of Special Taxation Act. Nevertheless, the instant disposition that did not recognize reduction or exemption of capital gains tax on a different premise is unlawful.

B. Determination

1) Article 70(1) of the former Restriction of Special Taxation Act is prescribed by Presidential Decree where farmland is located.

Article 67 (2) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 23590, Feb. 2, 2012) provides that "direct cultivation" means that a resident is engaged in cultivating crops or growing perennial plants in his/her own farmland or cultivating or cultivating 1/2 or more of them with his/her own labor, in which the said provision may be used as a means of tax evasion." In this context, "a farmer who cultivates or cultivates 1/2 or more of his/her own labor with his/her own labor" should be strictly interpreted in light of the fact that the said provision can be used as a means of tax evasion. In addition, the burden of proving "direct farming" as a requirement of tax abatement or exemption should be interpreted to be against a taxpayer who claims capital gains tax reduction or exemption without any reasonable interpretation of the said provision (see, e.g., Supreme Court Decision 2009Nu1964, Oct. 29, 194).

(See Supreme Court Decision 2010Do1191 Decided January 27, 201, etc.)

2) In light of these standards, it is insufficient to recognize that the Plaintiffs acquired the instant substitute farmland due to the need for cultivation only with respect to whether or not the Plaintiffs had maintained their own farmland for more than three years. The written evidence Nos. 5 through 15 (including each number), which corresponds to the Plaintiffs’ assertion, and with respect to the witness ParkCC’s partial testimony, and witness DoD’s testimony.

In particular, evidence No. 5-1 (A's factual confirmation) and some testimony of ParkCC by witnesses made it to be almost every day that the plaintiffs set up a farming house in this court. However, this is not only a significant difference between the plaintiffs' number of contaminations (not exceeding 10 times a month) to the large farmland in this case submitted by the plaintiffs, but also the statement that ParkCC had a previous tax official from around 200 because it was difficult for the plaintiffs to do so without any special reason, and it is not easy to believe this.

Rather, in light of the following circumstances, it is difficult to view that the Plaintiff was constantly cultivated or cultivated with its own labor for not less than three years after acquiring substitute farmland due to necessity for cultivation, or not less than 1/2 of the farming work was cultivated or cultivated with its own labor.

① According to the statement No. 14-1 of the evidence No. 14, the plaintiffs are living in ○○○○-dong 00-00, approximately 00.3 kilometers away from the car driving distance to the car driving distance. According to the statement No. 5-1 through No. 3, the sales of the ○○-dong 000 won in 2000, KRW 00 in 2000, KRW 00 in 200 in 200, and KRW 00 in 200 in 200, and KRW 00 in 200, the main income and occupation of the plaintiffs are engaged in a restaurant business rather than agricultural management, and both witnesses also considered KimB while supplying the plaintiffs' restaurants to the restaurants. Rather, it conforms to the fact that the plaintiffs did not engage in agriculture.

② Also, even if the Plaintiff’s Habs Receipt (Evidence No. 6 and No. 8) submitted was analyzed, the Plaintiffs passed the Habsbook of the Korea Highway Corporation 00 business offices adjacent to the instant large farmland even during the period of not cruel and harsh farming, etc. The records show that the Plaintiffs were entering and leaving the Habs Receipt to purchase food materials by visiting the 000 wholesale market near the instant large farmland. However, even if the Habs Receipt was written, it is difficult to view that the Plaintiffs were constantly cultivated the large farmland of this case.

③ By the year of 2000, ParkCC stated that the Plaintiffs were deaf-in and did not thereafter, and the tax officials from the field investigation were given a statement.

3) In light of the above facts, it is reasonable to view that the Plaintiffs, who run a restaurant with daily sales in excess of KRW 00,000,000, purchased the instant substitute farmland in their residential place and distance, rather than directly cultivating the farmland, with the aim of saving the transfer margin on the previous farmland in this case. In particular, the Plaintiffs asserted that the Plaintiff had been a large farmer from October to October of each year, and that the daily labor force was the same as one time even if they asserted that they had been against the company from October to October of each year (the preparatory brief No. 5 of October 200), and even if the Plaintiffs alleged that they were against the company’s assertion, in light of the fact that the labor hours were short compared to the daily labor hours of the self-employed farmer engaged in the ordinary agriculture, it would eventually be considered that the Plaintiffs, who were to make a large-scale farmer, was able to easily use the farmer’s houses for the purpose of cutting off, rather than agricultural management.

4. Conclusion

Thus, all of the plaintiffs' claims of this case are dismissed for the reason that they are without merit.

It is so decided as per sentence.

Related Acts and subordinate statutes

director of the former Restriction of Special Taxation Act (amended by Act No. 11133, Dec. 31, 201)

Article 70 (Abatement or Exemption of Transfer Income Tax for Substitute Land for Farmland)

(1) A necessity for cultivation of land directly cultivated by a resident prescribed by Presidential Decree residing in a farmland location.

에 의하여 대통령령으로 정하는 경우에 해당하는 농지로 대토(����)함으로써 발생하는 소득

For the capital gains tax, the tax amount equivalent to 100/100 of the capital gains tax shall be reduced or exempted: Provided, That the relevant land shall be exempted;

Residential, commercial and industrial areas under the National Land Planning and Utilization Act (hereafter in this Article, referred to as "residential and industrial areas");

(u) Residential areas, etc. or substitute land pursuant to the Urban Development Act or other Acts;

분(��������) 전에 농지 외의 토지로 환지예정지 지정을 받은 경우에는 주거지역 등에 편입

income prescribed by Presidential Decree, generated by the date of designation as a planned land substitution;

Only capital gains tax shall be exempted.

(2) The land that is transferred or acquired pursuant to paragraph (1) shall be under the National Land Planning and Utilization Act.

Farmland included in a residential area, etc. or before a disposition of replotting is taken pursuant to the Urban Development Act or other Acts.

No. 1 in cases of land prescribed by Presidential Decree, other than land designated as reserved for replotting.

paragraph (1) shall not apply.

(3) A person who wishes to be eligible for reduction or exemption under paragraph (1) shall apply for reduction or exemption, as prescribed by Presidential Decree.

(c)

director of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 23590, Feb. 2, 2012)

Article 67 (Requirements, etc. for Reduction or Exemption of Transfer Income Tax for Substitute Land for Farmland)

(1) Residents prescribed by Presidential Decree referred to in Article 70 (1) of the Act shall fall under any of the following subparagraphs for at least three years:

applicable area (at the time of commencement of cultivation, it was applicable to the area, but its administrative district was reorganized, etc.);

Residence in the area which does not correspond thereto; hereafter in this Article, it shall include the area in which the person is located;

one person means one person.

1. An area in a Si/Gun/Gu (referring to an autonomous Gu; hereafter the same shall apply in this paragraph) where farmland is located;

2. An area located in a Si/Gun/Gu adjacent to an area referred to in subparagraph 1.

3. An area within 20 kilometers in a straight line from the farmland concerned.

- 8-

(2) For the purpose of Article 70 (1) of the Act, the direct cultivation of agricultural crops by a resident on the farmland owned by him/her.

It is engaged in cultivating perennial plants at all times or with a half or more of the farming work with its own labor;

The term “culture or cultivation” means farming or cultivation.

(3) In cases prescribed by Presidential Decree pursuant to Article 70 (1) of the Act, agriculture substituted for farmland if necessary for cultivation of eggs.

land means any of the following cases:

1. One year from the date on which a person, who resided in a location of previous farmland for at least three years, transfers the previous farmland;

(Purchase by consultation and expropriation under the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor and out thereof)

new farmland for not less than three years after acquiring other farmland within 2 years, where such farmland is expropriated in accordance with the laws of the State.

In any of the following cases, which have been cultivated while residing in a location:

(a) Newly acquired farmland whose area is not less than one half of the area of farmland to be transferred; and

(b) The value of farmland to be newly acquired is completely transferred.