Since it is not recognized that a person has been engaged in crops cultivation, it cannot be deemed illegal to exclude special long-term holding deduction from non-business land.

It is insufficient to conclude that the Plaintiff was engaged in the cultivation of crops in the farmland in this case for not less than eight years or engaged in the cultivation of not less than 1/2 of the farming work with the Plaintiff’s labor force, and there is no other evidence

Article 95 of the Income Tax Act

2015Gudan50945 Revocation of Disposition of Imposing capital gains tax

KimA

The Director of Incheon Tax Office

on October 22, 2016

on 17, 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 disposition of imposition of capital gains tax of KRW 000 for the year 2013 against the Plaintiff on November 3, 2014 is revoked.

1. Details of the disposition;

A. On November 28, 2001, the Plaintiff acquired and owned 594 square meters prior to ○○○○-dong, ○○○○-dong, ○○○○, ○○, and 594 square meters (hereinafter “instant farmland”), and transferred the farmland to BB on May 6, 2013.

B. The Plaintiff filed an application for reduction or exemption of capital gains tax with the Defendant on the ground of one’s own cultivation for at least eight years, and the Defendant denied the reduction or exemption of capital gains tax on one’s own farmland for at least eight years, and denied the special long-term holding deduction by deeming the instant farmland as non-business land. On November 3, 2014, the Plaintiff issued a disposition of imposition of capital gains tax of 000 won for the Plaintiff for the year 2013 (hereinafter “instant disposition”).

C. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on February 4, 2015, but the Tax Tribunal dismissed the said appeal on July 10, 2015.

[Ground of recognition] Facts without dispute, entry of Gap evidence 1 to 3, 22 and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) Since from December 20, 2002, the Plaintiff resided with her husband in ○○○○-dong ○○○○○○○, ○○○, ○○○, and directly cultivated the instant farmland for at least eight years, capital gains tax shall be reduced or exempted.

(2) Even if it is not acknowledged that the Plaintiff directly cultivated the farmland of this case for eight (8) years, the Plaintiff had cultivated at least the same time after October 2009, and thus, the special deduction for long-term possession of the farmland of this case should be applied to the land for business.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Determination on the first argument

(A) Under the principle of no taxation without law, the interpretation of tax laws and regulations shall be interpreted in accordance with the text of the law, barring special circumstances, and shall not be extensively interpreted or analogically interpreted without reasonable grounds. In particular, it would be consistent with the principle of fair taxation with the principle of fair taxation to ensure that the provision of tax reduction and exemption is clearly considered as a preferential provision (see, e.g., Supreme Court Decision 2008Du11372, Aug. 20, 2009).

Article 69 (1) of the former Restriction of Special Taxation Act provides that "the amount of tax equivalent to 100/100 of capital gains tax shall be reduced or exempted on income accruing from the transfer of land prescribed by Presidential Decree, among land cultivated directly by a resident prescribed by Presidential Decree at the seat of farmland for at least eight years, and Article 66 (13) of the former Enforcement Decree of the Restriction of Special Taxation Act provides that "the direct cultivation by the method prescribed by Presidential Decree" in the main sentence of Article 69 (1) of the former Enforcement Decree of the Restriction of Special Taxation Act means that a resident engages in the cultivation of crops or the growing of perennial plants on his/her own land or the cultivation of perennial plants with his/her own labor, or the cultivation or cultivation with 1/2 or more of them by using his/her own labor," by interpreting the above provision, it shall be deemed that the above provision satisfies the requirements of self-sufficiency, and it shall not be deemed that the cultivation with the meaning of "self-help labor" or with the help of his/her family members, or the employment of another person under his/her responsibility or calculation (see, etc.

The transferor who asserts that farmland had been residing at the location of farmland and directly cultivated the land pursuant to the above provision must actively prove the fact (see, e.g., Supreme Court Decision 90Nu639, May 22, 1990).

(B) First, on December 20, 2002, the Plaintiff asserted that ○○○○-Dong ○○○○-dong ○○○○○○, and resided on March 10, 201 with her husband on December 20, 2002 (the Defendant does not dispute the residential requirements for the period from March 10, 201 to May 6, 201), as follows: (a) the Plaintiff submitted 20-dong 20-dong 20-dong 20; (b) the written 6-dong 2-dong 2-dong 2-dong 2-dong 2-dong 2-dong 2-dong 3-dong 2-dong 2-dong 2-dong 2-dong 3-dong 2-dong 1-dong 2-dong 2-dong 1-dong 3-dong 1-dong 26-dong 201 without an objective interview with ○○ 2-dong 1-dong 201-dong 3-dong 20.

Next, in light of the following circumstances, with respect to whether the Plaintiff is constantly engaged in cultivating crops or growing perennial plants on the instant farmland for not less than eight years, or has cultivated or cultivated one-half or more of the crops with the Plaintiff’s labor force, the following circumstances can be acknowledged by comprehensively taking into account the overall purport of the Plaintiff’s statement No. 3 (including the land number), Eul’s evidence No. 4 and 5 (including the land number), namely, ① the Plaintiff’s husband CCC appears to have cultivated fruit and vegetable plants on the ○○○-gu ○○○○○○○○○○○○○○○○○○○○○○○○, and it is difficult for the Plaintiff to regard the Plaintiff’s purchase of crops or perennial plants on the basis of the evidence that it was difficult for the ○○○○○○○○○○○○○○○○○○○○○○○○○○, and that it was purchased by the Plaintiff’s husband on the basis of the following facts: (i) the Plaintiff’s purchase of crops and 14.

Therefore, this part of the plaintiff's assertion is without merit.

(2) Judgment on the second argument

(A) According to Articles 95(2) and 104-3(1)1(a) of the former Income Tax Act, and Articles 168-6 and 168-8 of the former Enforcement Decree of the Income Tax Act, land for non-business purposes is excluded from the subject of special long-term holding deduction. If the ownership period of land is not less than five years, the period exceeding two years during the five years immediately preceding the date of transfer, the period exceeding one year during the three years immediately preceding the date of transfer, and the period exceeding 20/100 of the ownership period, and the farmland for which the owner does not reside in the farmland or is not cultivated by himself. In this case, the term “farmland for which the owner does not reside in the farmland or is not cultivated by himself” means farmland excluding farmland for which a person who actually resides in the neighboring area has made a self cultivation under the provisions of subparagraph 5 of Article 2 of the Farmland Act, and the term “self-arable” means that a farmer engages in full-time farming or perennial work in the farmland or his own labor force.

(B) As seen earlier, it cannot be recognized that the Plaintiff was engaged in cultivating crops in the farmland of this case or cultivated at least 1/2 of the farming work with his own labor during the period stipulated in Article 168-6 of the former Enforcement Decree of the Income Tax Act. As such, the Defendant cannot be deemed unlawful to exclude the special deduction for long-term holding of the farmland of this case from the land for non-business use.

(3) Sub-decisions

Therefore, since the instant disposition is lawful, the Plaintiff’s assertion seeking the revocation of the instant disposition on a different premise is without merit.

3. Conclusion

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