Cho Jae-2018-0758 (Law No. 16, 2018)

The disposition that does not apply the provision of non-taxation for the 8 year is legitimate.

Comprehensively taking account of the confirmation of a leased farmer and the fact that a direct subsidy for rice income was not received, it is insufficient to recognize that the Plaintiff had been engaged in cultivating crops in the instant land or cultivated or cultivated not less than half of the farming work with his own labor, and there is no other evidence to acknowledge otherwise.

Article 69 of the Restriction of Special Taxation Act (Reduction or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

2018Gudan778 Disposition to revoke the imposition of capital gains tax

AA

BB Director of the Tax Office

on October 24, 2019

May 15, 2019

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of capital gains tax of KRW 298,661,931 against the Plaintiff on July 1, 2017 is revoked.

1. Details of the disposition;

A. On May 12, 2004, the Plaintiff acquired 00 00 -00 000 - 0000 - 4,618 m2 (hereinafter “instant land”) and transferred the same on August 25, 2016, and then reported the transfer income tax by applying Article 69 of the Restriction of Special Taxation Act (amended by Act No. 14390, Dec. 20, 2016; hereinafter the same) to “the reduction or exemption for self-farmland for at least eight years.”

B. On July 1, 2017, the Defendant issued a correction and notification of the capital gains tax of KRW 00,000,000 (including additional tax) for the year 2016 on the ground that “the Plaintiff cannot be deemed to have cultivated the instant land directly” to the Plaintiff (hereinafter “instant disposition”).

C. The Plaintiff appealed and filed an objection on September 27, 2017, and filed an appeal with the Tax Tribunal on January 17, 2018, but the judgment dismissing the Plaintiff’s claim was issued on April 16, 2018.

[Ground of recognition] Facts without dispute, entry of Eul's evidence Nos. 1 through 6, purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The plaintiff cultivated the land of this case for not less than 8 years, but did not do so.

The instant disposition taken by mistake is unlawful.

B. Determination

(1) Article 69(1) of the Restriction of Special Taxation Act provides that “The Presidential Decree residing at the seat of farmland” is prescribed.

Article 66 (13) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 27848, Feb. 7, 2017) provides that "The direct cultivation in the manner prescribed by Presidential Decree" means that a resident is engaged in cultivating crops or growing perennial plants on his/her own land at all times or cultivating or growing them with his/her own labor, with respect to income accruing from the transfer of land prescribed by Presidential Decree, among the land cultivated directly by a resident for not less than eight years by means prescribed by Presidential Decree, and Article 66 (13) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 27848, Feb. 7, 2017)."

In addition, the burden of proof on the direct cultivation of the land that had been transferred while residing in the farmland location for at least eight years lies in a taxpayer who asserts exemption of capital gains tax pursuant to the said provision (see Supreme Court Decision 94Nu996, Oct. 21, 1994).

(2) Therefore, in full view of the following circumstances that are recognized by the purport of the entire statements and arguments as follows: ① at the time of the tax investigation, SS was stated as follows: “At the time of the Plaintiff’s entry into the instant land, the Plaintiff, the owner of the instant land, stated as follows: “At the time of the tax investigation, the Plaintiff had been engaged in the farming industry, etc. or cultivated or cultivated not less than half of the farming industry, etc. with its own labor force,” ② The Plaintiff, the owner of the instant land, did not receive direct payments of rice income; ③ the Plaintiff was given subsidies in the name of SS; ③ the Plaintiff paid money at the due date for pleading and was engaged in farming industry to SS; and even if the Plaintiff requested only farming industry, the Plaintiff’s meaning does not seem to have been considered to have been ordinarily engaged in the farming industry or cultivated with its own labor.” There is insufficient evidence to acknowledge otherwise.

(3) Therefore, the instant disposition based on the same premise is lawful, and the Plaintiff’s above note is lawful.

The head of the office shall not have reasons.

3. Conclusion

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