Cho High Court Decision 2008Da4111 (Ob. 18, 2009)

Whether land for non-business use is land

Farmland in an urban area for which two years have elapsed from the date of incorporation into an urban area shall be applicable to the land for non-business regardless of whether crops are cultivated.

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

Article 104 (Tax Rate of Transfer Income Tax)

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

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of capital gains tax of KRW 29,90,370 against the Plaintiff on September 12, 2008 shall be revoked.

1. Circumstances of dispositions of the instant case;

The following facts are not disputed between the parties, or acknowledged by comprehensively taking account of the overall purport of the pleadings in each entry of Gap evidence of Nos. 1, 2, 3, 1, 2, 4 and 5 of Nos. 1, 2, 4 and 5 of No. 2.

가. 원고는 1988. 2. 24. 자신의 부(父) 박★★으로부터 진해시 ☆☆동 13 전 274㎡ (이하 '이 사건 토지'라 한다)를 증여받고, 1988. 2. 26. 원고 명의로 소유권이전등기를 마쳤다.

B. On May 21, 2008, the Plaintiff agreed on and transferred the instant land to a public site located in the Dong-dong Sports Facilities Development Project of Do, Do, Do, Do, and Do, and calculated gains on transfer by using the transfer value to the Defendant’s KRW 93,160,000, converted acquisition value to KRW 32,83,724, and reported and paid capital gains tax calculated by applying the general tax rate.

C. The Defendant: (a) deemed that the instant land is land for non-business under Article 104-3 of the Income Tax Act (amended by Act No. 9270 of Dec. 26, 2008) as farmland in an urban area under the National Land Planning and Utilization Act (hereinafter “National Land Planning Act”); (b) applied 60% of the heavy tax rate; (c) deemed the conversion acquisition value of the instant land as KRW 23,838,000; and (d) re-calculated the transfer income tax rate by deeming the conversion acquisition value of the instant land as KRW 29,90,370 for the Plaintiff on September 12, 2008 (hereinafter “instant disposition”).

D. On October 15, 2008, the Plaintiff appealed to the Tax Tribunal on December 4, 2008, but was dismissed on February 18, 2009.

2. Whether the dispositions of the instant case are legal.

A. The plaintiff's principal

The gist of the plaintiff's assertion is that since the plaintiff used the land of this case as farmland for the original purpose of 20 years from the time of acquisition to the time of transfer, the land of this case constitutes the land for business, and even if not, the plaintiff had already been transferred on July 1, 2002, and thus, the land of this case constitutes a case where "the land of this case was transferred to a person who had been engaged in agricultural management for 8 years or longer under Article 83-5 (3) 2 of the Enforcement Rule of the Income Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 71 of Apr. 14, 2009) and was excluded from the land for non-business as "the land of this case was transferred to December 31, 2006 by the farmer before December 31, 2006," but the disposition of this case should be revoked

(b) Related statutes;

Attached sheet and conflict.

C. Determination

(1) According to the main sentence of Article 104-3(1) and subparagraph 1 (b) of the Income Tax Act, Article 168-6 subparag. 1 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 21062 of Oct. 7, 2008), and Article 168-8(4), (5)1 and (6) of the Enforcement Decree of the Income Tax Act, farmland in an urban area (excluding green belt areas and restricted development zones) under the National Land Planning Act among urban areas during the period exceeding 20/10 of the period exceeding two years from the date of transfer and the transfer exceeding one year from the date of transfer when farmland was re-owned for at least one year retroactively from the date of incorporation into an urban area is excluded from non-business land.

(2) The following facts are acknowledged by comprehensively taking account of the overall purport of the pleadings in each of the statements in YYYYYY, No. 4, 8, and 9. The land in this case is classified into Class II general residential areas under Article 1978-247 of the Gyeongnam-do Notice of August 21, 1978. The land in this case was classified into Class II general residential areas under the National Land Planning Act in the possession period from February 26, 198 to May 21, 2008. The land in this case was located within Class II general residential areas under the National Land Planning Act within the ownership period from February 26, 198 to May 21, 2008. The land in this case was incorporated into the urban area in comparison with the provisions of the above related Acts and subordinate statutes, regardless of whether the land in this case was used for farming continuously as alleged by the Plaintiff.

(3) Meanwhile, the following circumstances are revealed in Gap evidence Nos. 11-1 and Eul evidence Nos. 7 and the argument of this case. In other words, since the plaintiff moved into Jinhae-si 69-6 on Oct. 28, 1982 and moved into Jinhae-si 69-6 on Sept. 3, 2008, the plaintiff has been living in Jinhae-si. The plaintiff submitted a village passbook and a village farmland farmer's cultivation certificate to the transfer date of the land of this case from Oct. 198, 198, to the transfer date of the land of this case from Sep. 3, 2008. Thus, the plaintiff cannot be deemed as "a person farming before Dec. 31, 2006," and there is no other evidence or evidence to do so.

(4) Therefore, the instant disposition that deemed the instant land as non-business land under Article 104-3 (1) 1 (b) of the Income Tax Act is lawful, and the Plaintiff’s assertion disputing this is not acceptable.

3. Conclusion

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