Cho High Court Decision 2012J1424 (Law No. 106.07)

In consideration of occupation, career, degree of income, age, etc., it is difficult to recognize that it has been self-sufficient for not less than eight years.

It is difficult to recognize that a third party has cultivated at least 1/2 of the farming work with his own labor in light of the fact that a certified judicial scrivener's office has been operated after his/her retirement as a public official and received a high amount of business income, the area of the land is relatively wide in cultivating mixed land, and the land is also owned in addition to the transferred land, and some of the land appears to be a third party to stop farming.

2012Guhap3188 Revocation of Disposition of Imposing capital gains tax

XX

Head of North Busan District Tax Office

December 7, 2012

December 21, 2012

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposing capital gains tax of KRW 000 (including additional tax) for the year 2010 against the Plaintiff on September 6, 2011 shall be revoked.

1. Details of the disposition;

A. On February 4, 1984, the Plaintiff acquired and owned each ownership of 1,230 square meters of Gangseo-gu Busan Metropolitan Government 000 P, and 1,382 square meters of the same 00-1,000-1,000 square meters (hereinafter “each of the above lands”) on December 26, 1984, and transferred each of them to the Korea Land and Housing Corporation on April 12, 2010, respectively.

B. The Plaintiff resided within a Si/Gun/Gu where the instant land is located or within a 20km radius from the said land, and the instant land constitutes farmland under the Farmland Act.

C. On June 21, 2010, the Plaintiff filed an application for reduction or exemption of capital gains tax (100% of reduction or exemption, and 00 won of reduced or exempted tax) by applying Article 69(1) of the former Restriction of Special Taxation Act (amended by Act No. 10406, Dec. 27, 2010; hereinafter the same) on the ground that he/she resided directly in the location of the said land for at least eight years while filing a preliminary return on the tax base of capital gains tax following the transfer of the instant land.

D. However, on September 6, 2011, the Defendant issued a notice of correction and notification of the transfer income tax of 00 won (including additional tax for unfaithful payment 000 won) for the Plaintiff in 2010, by applying Article 77 of the former Restriction of Special Taxation Act to the exclusion of the application of Article 69(1) of the former Restriction of Special Taxation Act by deeming that the local verification of the transfer income tax related to the transfer income tax satisfies the requirements for re-village and farmland but the requirements for self-reliance have not been met for at least eight years (hereinafter “instant disposition”).

E. On November 25, 201, the Plaintiff filed an objection with the Commissioner of the Busan Regional Tax Office on November 25, 201, but was dismissed on December 20, 201, and thereafter, the Plaintiff filed an appeal with the Tax Tribunal on March 9, 2012, but was dismissed on June 7, 2012.

[Basis] Facts without dispute, Gap evidence 1, 2, 3, Gap evidence 4-1, 2, Gap evidence 6-1, 2, 3, Eul evidence 1-1, 2, and Eul evidence 2, and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

1) The assertion that direct cultivation has been conducted for not less than eight years

Although it is clear that the Plaintiff constitutes reduction of capital gains tax by directly cultivating at least 1/2 of the instant land farming work with its own labor for at least eight years, the Defendant’s disposition based on a different premise is unlawful.

2) Claim of violation of the principle of retroactive taxation prohibition

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 referred to as "the Enforcement Decree provision of this case") provides that the meaning of "direct farming" as newly established by Presidential Decree No. 19329 of Feb. 9, 2006 shall include not only cases where the transferor cultivates the meaning of "direct farming" but also cases where the owner engages in cultivating another person under his responsibility and account. Thus, even if the plaintiff's farming does not fall under more than 1/2 of the farming work, the defendant is retroactively applying the above provision of the farming work to the previous farming act before the establishment of the above provision of this case, and thus, it constitutes a violation of the taxpayer's right not to acquire trust, and thus, is retroactively unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Determination on the assertion that direct cultivation was conducted for at least eight years

A) First, in order to be eligible for reduction or exemption of capital gains tax, the land of this case shall be cultivated or cultivated directly with its own labor, i.e., cultivation of crops or perennial plants, or 1/2 or more of the farming work with its own labor, for eight years or more from the time when the Plaintiff acquired the land of this case to the time when it was transferred pursuant to Article 66(1) and (13) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 23590, Feb. 2, 2012; hereinafter the same) and Article 66(1) and (3) of the same Act (amended by Presidential Decree No. 23590, Feb. 2, 2012; hereinafter the same shall apply). The fact that the Plaintiff used the land of this case as farmland of this case for eight years or more from the time when it acquired it to the time when it was transferred is presumed that it had been used by the transferor, not until the time it was presumed that it was done by the transferor (see Supreme Court Decision 990Nu.

B) However, 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), which is the provision of the Enforcement Decree of the same case, provides that "direct cultivation" shall be carried out by a resident on his own land at all times for cultivating crops or growing perennial plants, or by cultivating or cultivating more than half of farming works with his own labor," and Article 10 of the Addenda of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 19329 of Feb. 9, 2006) provides that the Enforcement Decree of the same case shall apply from the portion transferred after February 9, 2006.

Meanwhile, the former Enforcement Decree of the Restriction of Special Taxation Act, which is one of the requirements for reduction or exemption of transfer income tax, does not separately stipulate the concept of "direct farming". At that time, the Supreme Court has interpreted that the meaning of "direct farming" includes not only cases where a transferor cultivates a son but also cases where a person is employed and cultivated under his responsibility and account (see, e.g., Supreme Court Decision 94Nu996, Oct. 21, 1994). However, as long as the provisions of the Enforcement Decree of this case clearly stipulate that "a 1/2 or more of the farming work should be cultivated with her own labor force", it shall not be permitted to include cases where a person is employed by another person and cultivated with her own labor force beyond the scope of grammatic interpretation. 20 or more provisions of Article 2 subparag. 5 of the Farmland Act (see, e.g., Supreme Court Decision 200Da2817, Dec. 2, 1994).

C) In light of the above facts, the Plaintiff’s assertion that it was difficult for the Plaintiff to directly submit 1, 2, and 2 to 3 years old-old agricultural products or 2 to 0 years old-old agricultural products, and that it was difficult for the Plaintiff to directly submit 1, 2, and 5 years old-old agricultural products or 2 to 0 years old-old agricultural products, and that it was difficult for the Plaintiff to directly submit 20 years old-old agricultural products or 1 to 6 years old-old agricultural products or 20 years old-old agricultural products, and that it was difficult for the Plaintiff to directly submit 0 or more old-old agricultural products or 20 years old-old agricultural products, and that it was difficult for the Plaintiff to directly submit 0 or more old-old agricultural products or 20 years old-old agricultural products, and that it was difficult for the Plaintiff to directly submit 0 or more old-old agricultural products or 20 years old-old agricultural products, and that it was also difficult for the Plaintiff to use 20 or 200 years old-old agricultural products.

2) Determination on the assertion of violation of the principle of retroactive taxation prohibition

The plaintiff asserts that the provision of this case concerning "direct farming" is applied from February 9, 2006 to 1/2 after its establishment, so even if the plaintiff's farming falls short of 1/2 of the "agricultural work" before the establishment of the above provision, the above provision is applied to "transfer" after February 9, 2006 pursuant to Article 10 of the Addenda of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 2006, Feb. 9, 2006), and it is not applied separately according to the period of cultivation. Since the provision of this case concerning "direct farming" is applied to the interpretation and application of the new provision of the Enforcement Decree of this case to 19, the plaintiff's transfer of real estate after the establishment of this case's 19,000,000,0000 won after the enforcement date of this case's 9,000,000 won won after the enforcement date of this case's taxation.

3) Therefore, the Defendant’s instant disposition imposing the transfer income tax on the Plaintiff on the ground that it did not meet the requirements for reduction or exemption of transfer income tax on self-Cultivating farmland under Article 69(1) of the former Restriction of Special Taxation Act

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.