Suwon District Court-2016-Gu Group-1428 (No. 17, 2017)

Whether it is subject to reduction or exemption of capital gains tax for self-employed farmland and special deduction for long-term holding;

The defendant's disposition excluding the reduction and exemption of self-owned farmland and the special deduction for long-term holding of farmland is legitimate, since it is difficult to view that the plaintiff carried one-half or more of his own labor force and cultivated or cultivated it.

Article 69 of the Restriction of Special Taxation Act

Seoul High Court 2017Nu52094 Revocation of Disposition of Imposing capital gains tax

AA

K Director of the Korean Tax Office

2017.9.19

o October 10, 2017

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The transfer income tax reverted to the Plaintiff in November 9, 2015 by the Defendant against the Plaintiff on November 9, 2015

484,798,430 won (including additional duties) shall be revoked.

1. Quotation of judgment of the first instance;

The reasoning for this court's explanation concerning this case is that "the 6th executive officer of the first instance court's judgment" is dismissed as "the 9th executive officer of the first instance court's judgment", and the plaintiff's argument is stated as the reasons for the first instance court's judgment, except for the addition of the following judgments, and therefore, it is accepted in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the

2. Additional determination

A. The plaintiff's assertion

1) Article 95(2) of the former Income Tax Act excludes land for non-business under Article 104-3 subject to the special deduction for long-term possession, but Article 104-3(1) of the former Income Tax Act does not mention Article 95(2) in defining land for non-business use. Therefore, exclusion of special deduction for long-term possession of land for non-business use under Article 95(2) of the former Income Tax Act from special deduction for long-term possession due to defects in the above statutory provisions

2) Article 95(2) of the former Income Tax Act provides for the exclusion of special long-term holding deduction for up to 30% transfer margin from capital gains even though the above defects exist as above. Moreover, Article 95(2) of the amended Income Tax Act as of December 15, 2015 includes land for non-business as a subject of special long-term holding deduction. Therefore, Article 95(2) of the former Income Tax Act violates the principle of no taxation without law and excessive prohibition under the Constitution.

3) The time when the Plaintiff received the remainder of the sale of the instant real estate from September 1, 2014 to November 2014. However, this is due to the fact that the payment of the remainder was delayed due to road security issues. Since the Plaintiff sold the instant real estate en bloc and received the down payment and the intermediate payment around April 2014, and the Plaintiff actually transferred the instant real estate, the provisions of Article 66(14) of the former Enforcement Decree of the Restriction of Special Taxation Act, effective as of July 1, 2014, should not be applied to the Plaintiff.

B. Determination

1) As to the private cultural assertion under Article 95(2) of the former Income Tax Act, Article 95(2) of the former Income Tax Act excludes land for non-business under Article 104-3 subject to the special deduction for long-term holding under Article 104-3, and Article 104-3(1)1(a) provides that "farmland the owner of which does not reside in the seat of his/her farmland or does not cultivate himself/herself as prescribed by Presidential Decree." According to the above provision, it is clear that Article 95(2) of the former Income Tax Act includes non-business land under Article 104-3(1)1(a) of the former Income Tax Act, which is provided for non-business land subject to the special deduction for long-term holding,

The plaintiff pointed out that only the phrase "Article 96 (2) 8 and Article 104 (1) 8" is written on the phrase "land for non-business use" under Article 104-3 (1) of the former Income Tax Act, but so long as Article 95 (2) of the former Income Tax Act specifies "land for non-business use under Article 104-3", it is sufficient to interpret that land for non-business use under Article 104-3 of the former Income Tax Act is subject to the application of special deduction for long-term holding under Article 95 (2) of the former Income Tax Act, and it is sufficient to interpret that land for non-business use under Article 104-3 of the former Income Tax Act is subject to the application of special deduction for long-term holding under Article 95 (2) of the former Income Tax Act, on the ground that there is any defect in the form of the provision, or that Article 95

2) As to the assertion of violation of the principle of no taxation without the law and the principle of no taxation without the law, since it is difficult to view any defect in the form of the provisions of Articles 95(2) and 104-3 of the former Income Tax Act, each of the above provisions of the laws, excluding non-business land subject to the special deduction for long-term holding, do not violate the principle of no taxation without the law. Furthermore, there is no illegality in violation of the principle of no taxation against the principle of no taxation without the law merely because Article 95(2) of the former Income Tax Act provides that the special deduction for long-term holding shall be deducted from

On the other hand, Article 95 (2) of the Income Tax Act amended on December 15, 2015 deleted the contents that exclude non-business land from the subject of special deduction for long-term possession, and the above amended provisions apply from the income portion generated from the assets transferred after January 1, 2016, which is the enforcement date, so the above amended provisions do not apply to the taxation of transfer income tax of the instant real estate that was transferred before that date.2) Therefore, it cannot be said that the king provision, which excluded the special deduction for long-term possession of the land for non-business under the above amended provisions, was contrary to the principle of excessive prohibition. The plaintiff's assertion on this part is without merit.

3) As to the assertion that Article 66(14) of the former Enforcement Decree of the Restriction of Special Taxation Act is not applicable, Article 66(14) of the former Enforcement Decree of the Restriction of Special Taxation Act provides that the farmer’s total amount of wages shall be excluded from the taxable period of at least 37 million won during the cultivation period of the farmland by the person who has been exempted from capital gains tax, which was newly established on February 21, 2014 and enforced on July 1, 2014. The capital gains tax was levied on the income realized from the transfer of assets from January 1 to December 31, 2014, and as a matter of principle, the transfer date becomes the date of settling the price of the relevant assets (Articles 5(1) and 98 of the Income Tax Act). According to the reasoning that the Plaintiff’s transfer date of the real estate in this case was fully paid between September 20, 2014 to November 14, 2014, the transfer date of the real estate in this case can not be applied to the transfer date.

In addition, the exemption from capital gains tax on self-employed farmland under Article 69 (1) of the former Restriction of Special Taxation Act can be proved by the person liable to pay the tax 'self-Cultivating' of more than 1/2 of farming work for not less than 8 years. As examined in the judgment of the first instance court, it is difficult to see that the plaintiff who had been working as a university educational administrative office ** is sufficiently proven about such circumstances, such as Sungnam-si, Yangyang-si, Seoul Metropolitan City, and Young-si, etc., and on the contrary, at the time of the defendant's investigation of capital gains tax, the plaintiff voluntarily made a statement that "*** University's employee's employee was not a farmer's employee." This part of the plaintiff'

3. Conclusion

Therefore, the judgment of the first instance court is justifiable, and the plaintiff's appeal is dismissed as it is without merit.