Cho-2015-China-1564 (2)

Whether farmland falls at the time of transfer

In light of all circumstances, such as the fact-finding certificate, etc., which allow private individuals to voluntarily prepare and do not seem to be objective materials, the evidence submitted by the Plaintiff alone is insufficient to recognize that the land of this case was farmland at the time of transfer.

Article 69 of the Restriction of Special Taxation Act: Reduction or exemption of transfer income tax for self-farmland

Incheon District Court 2016Gudan50461 Revocation of Disposition of Imposing capital gains tax, etc.

[Plaintiff-Appellee]

○ Head of tax office

2017.03.07

oly 16, 2017

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 225,560,00 for the Plaintiff on February 5, 2015 shall be revoked.

1. Details of the disposition;

A. On March 31, 1962, the Plaintiff acquired and owned 4,100,000 square meters (hereinafter “instant land”) in ○○○○○○-si, ○○○○○○○, ○○○○, ○○○, and 5,088 square meters (hereinafter “instant land”). On September 12, 2013 and October 21, 2013, the Plaintiff transferred KRW 4,100,000 to the non-party ○○, and on November 30, 2013, the Plaintiff reported and paid the capital gains tax to the Defendant on November 30, 2013 by applying the reduction and exemption provisions for self-farmland for at least eight years under Article 69 of the former Restriction of Special Taxation Act (Amended by Act No. 13560, Dec. 15, 2015; hereinafter the same).

B. On February 5, 2015, the Defendant excluded the application of the said provision on the ground that the instant land was not farmland at the time of transfer, thereby making a correction and notification of KRW 225,560,000 to the Plaintiff for the transfer income tax for the year 2013 (hereinafter “instant disposition”).

C. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on March 2, 2015, but the Tax Tribunal dismissed the said appeal on March 2, 2016.

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, 12, Eul evidence 1 (including branch numbers), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Since the Plaintiff’s land is self-sufficient farmland for not less than eight years, capital gains tax should be reduced or exempted pursuant to Article 69 of the former Restriction of Special Taxation Act, the instant disposition made on a different premise is unlawful.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

1) The land for which capital gains tax may be reduced or exempted under Article 69(1) of the former Restriction of Special Taxation Act and Article 66(1), (4), and (5) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 26070, Feb. 3, 2015; hereinafter the same) shall be farmland as of the date of transfer as the land directly cultivated by the resident prescribed by Presidential Decree residing in the location of the farmland for at least eight years, and the land which is not actually cultivated as of the date of transfer shall not be deemed farmland as of the date of transfer, unless it is used as farmland by the landowner’s own or by another person, and shall not be deemed farmland as of the date of transfer, unless it is temporarily in a state of temporary border (see Supreme Court Decision 2006Du13183, Apr. 11, 2008). The burden of proof as to the requirements for reduction or exemption shall be borne by the taxpayer who asserts it (see Supreme Court Decision 90Nu29363, Apr. 23, 1991).

2) In light of the above legal principles, if the Plaintiff submitted 1st 2 and 3 kinds of farmland as at the time of the transfer date, and the following circumstances were acknowledged as being comprehensively based on the overall purport of oral pleadings, i.e., ① land adjacent to the instant land was reclaimed for the purpose of creating a complex, i.e., “○○ Paplet”. The instant land was developed as part of the above 0th mar, after the Plaintiff buried and transferred it at the same height as the surrounding land around 201. ② The Plaintiff’s neighboring land was unable to gather water and drain 6 meters high compared to the instant land so that 1st 2nd 3rd marries cannot be seen as being reclaimed for 1st marries, but it was difficult to view that the Plaintiff’s soil was reclaimed for 2nd 1st marries and 2nd marries because it was difficult to produce 1st 2nd marg 3rd marg mar for the purpose of growing the instant farmland.

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, and it is so decided as per Disposition.