Seoul Administrative Court 2010Gudan26059 ( October 18, 2011)

Seocho 2010west 222 (Law No. 31, 2010)

It is recognized that an orchard has been directly cultivated for not less than 8 years.

In light of the fact that it has resided within 20km in a straight line from the orchard, the business income acquired from the operation of the construction business is small, the period of personal salivation, the period of domination, several months, and the fact that agricultural cooperatives directly cultivated the orchard in the fact-finding survey, etc., it is recognized as having cultivated the orchard directly for at least eight years.

Article 69 of the Restriction of Special Taxation Act

2011Nu42798 Revocation of Disposition of Imposing capital gains tax

XX

Head of Eastern Tax Office

Seoul Administrative Court Decision 2010Gudan26059 decided October 18, 2011

July 18, 2012

August 22, 2012

1. Revocation of a judgment of the first instance;

2. The Defendant’s imposition of KRW 000 of transfer income tax for the year 2009 and special rural development tax for the Plaintiff on April 12, 2010 shall be revoked.

3. All costs of the lawsuit are borne by the Defendant.

The same shall apply to the order.

1. Details of disposition;

On July 12, 198, the Plaintiff acquired and owned a house with 000-14 and 00-2 above ground (hereinafter referred to as “the instant orchard, etc.”) such as 00-14 and 00-2 square meters of Seoul Jung-gu, Jung-gu, Seoul, Seoul, and 00-2 of the same Act, and transferred the compensation amount to the MU on January 20, 2009 as a public site (xx3 national rental housing complex development project for the national rental housing project zone) in the aggregate of the compensation amount (00 won in land + 000 won in house).

In accordance with Article 69(1) and (3) of the Restriction of Special Taxation Act (amended by Act No. 9921, Jan. 1, 2010; hereinafter the same) on the ground that the Plaintiff directly cultivated the instant orchard for at least eight years on January 31, 2009, the Plaintiff filed an application for reduction of or exemption from capital gains tax for the total amount of KRW 000 upon the transfer of the instant orchard, etc.

However, on April 12, 2010, the Defendant: (a) deemed that the Plaintiff did not directly manage the instant land for at least eight years; and (b) did not accept the application for full reduction of or exemption from the capital gains tax applied by the Plaintiff; (c) considered that capital gains from the instant orchard, etc. fall under income from expropriation, such as land for public projects under Article 77(1) of the Restriction of Special Taxation Act; (d) reduced or exempted KRW 200 per cent of the calculated capital gains tax amount on KRW 000 for capital gains tax for 2009 and the said reduced or exempted tax amount, respectively, imposed KRW 00 for the special rural development tax (x20 per cent of the abated or exempted tax amount) in accordance with the Act on Special Rural Development for 2009 (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, Eul evidence 1, 3, and 10, the whole purport of the pleading

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

While the Plaintiff possessed the instant orchard, etc. while running an Oconstruction (individual enterprise or stock company), inn business, etc., it directly cultivated the instant orchard for not less than eight years while residing in the location of the instant orchard while operating small or short Oconstruction, etc., it is subject to reduction or exemption of capital gains tax and special rural development tax due to the transfer of the instant orchard, etc.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

From March 15, 198 to December 31, 1998, the Plaintiff operated a personal construction business with the trade name of "O construction", and was converted into a corporation for O construction from January 15, 199 (the shareholder consists of the Plaintiff and his wife, his child, etc.) and thereafter made a construction business, etc. as the representative director of the corporation at the time of the instant disposition. The Plaintiff, while operating the OO construction from around 192 to around 1998, obtained the annual gross income of KRW 00 to KRW 000,000 per annum from around 00 to December 31, 1998, and from around 2000 to about 00 to about 00 won, the Plaintiff engaged in the business from around 200 to April 29, 1992 to around 209 to April 29, 200- of the Dongdaemun-gu Seoul Special Metropolitan City.

From November 17, 1984 to April 25, 2006, the Plaintiff mainly resided in Dongdaemun-gu Seoul Metropolitan Government 000-29 away from the instant orchard (direct election, hereinafter the same shall apply). From February 26, 1992 to March 4, 1992, the Plaintiff resided in the instant orchard to the extent of 9.11km from the instant orchard, Namyang-si, Namyang-si, Seoul Metropolitan City, 000-18, x 000. From September 23, 2002 to April 25, 2006, the Plaintiff resided in the instant orchard to the extent of 3 years from 11.93km from the instant orchard, Namyang-dong, 00-10-102 Dong x 302 Dong 306.

On November 5, 2001, the Plaintiff applied for membership to the AAA Agricultural Cooperative (hereinafter referred to as the "Agricultural Cooperative") and confirmed on December 17, 2008, the Plaintiff was a member of the Agricultural Cooperative (3,000 won per share of investment, 00 won per share of investment), along with a certificate of the fact of cultivation written by the AAA and KimB of the head of the Ydong farming industry, GA and KimB of the farmland members, and on June 21, 2008, it was confirmed that the Plaintiff was a farmer in the instant orchard even in the individual fact-finding survey conducted by the Agricultural Cooperative on June 21, 2008.

When transferring the instant orchard, the Plaintiff received KRW 000 as compensation for losses for KRW 71 as a result of KRW 71 as a result of the transfer of the instant orchard from XX, and received KRW 000 as a compensation for farming losses. The Plaintiff confirmed that in the certificate of the fact of farming (Evidence No. 8-2) submitted at the time of compensating for farming losses, farmland members,CC, and Voluntary Dod Dod Dod Dod Dod Dod Dod Dod Dod Dod Dod Dod Dod Dod Do

[Ground of recognition] The facts without dispute, Gap evidence Nos. 1 through 3, 5, 8, Eul evidence Nos. 2, 3, 5 through 8, and 10, and the fact inquiry conducted by this court to the head of the Dong Seoul Agricultural Cooperative, the whole purport of the arguments

D. Determination

1) According to Article 69(1) of the Restriction of Special Taxation Act, a resident prescribed by the Presidential Decree who resides in a location of a farmland has cultivated for at least eight years and is prescribed by the Presidential Decree among the land subject to agricultural income tax, with a tax amount equivalent to 100/100 of the capital gains tax reduced or exempted. Of the residents prescribed by the Presidential Decree, Article 66(1)3 of the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 21307, Feb. 4, 2009; hereinafter the same shall apply) one of the "residents prescribed by the Presidential Decree residing in the location of the farmland" refers to those who resided in an area within 20 kilometers in straight line from the farmland and cultivated for at least eight years. According to Article 66(12) of the Enforcement Rule of the Restriction of Special Taxation Act, a "direct farming" is always engaged in cultivating crops or growing perennial plants on his/her own labor or cultivating at least half of them with his/her own labor. According to Article 127(1) of the Enforcement Rule of the Restriction of Special Taxation Act (amended by Ordinance No.

Meanwhile, Article 3 of the Act on Special Rural Development (amended by Act No. 9620 of Apr. 1, 2009) provides that a person whose income tax is reduced or exempted under the Restriction of Special Taxation Act is liable to pay special rural development tax, and Article 4 Subparag. 2 of the same Act provides that special rural development tax shall not be imposed on farmers and fishermen (including livestock pens) as prescribed by the Presidential Decree. Article 4(1)1 of the Enforcement Decree of the Special Act on Agricultural and Fishing Villages (amended by Presidential Decree No. 22576 of Dec. 30, 2010) provides that special rural development tax shall not be imposed on farmers and fishermen. Article 69 of the Restriction of Special Taxation Act provides that special rural development tax is not imposed due to the reduction

2) Comprehensively taking account of the following circumstances, it is reasonable to view that the Plaintiff resided in the location of the instant orchard and directly cultivated the instant orchard for not less than eight years. The Plaintiff is subject to full reduction or exemption of capital gains tax and special rural development tax on capital gains from the instant orchard, etc.

① From November 17, 1984 to the time of the instant disposition, the Plaintiff is a person residing within 20 km in a straight line from the instant orchard and residing in the location of the farmland.

② In light of the business income or wage and salary income accruing from the Plaintiff’s management of O construction from around 1992 to 2008, the monthly average amount of KRW 000 per month was exceeded, and the individual receipt business was 16 months, and the inn business was 4 months, and the Plaintiff’s income or personal receipt business accrued from O construction management, and the period during which the inn business was conducted, it is difficult to view that the Plaintiff cannot directly cultivate the instant orchard during the period of operating such business.

③ On November 3, 2001, the Plaintiff received confirmation from farmland members, etc. of the instant orchard at the time of joining the Nonghyup as its members. On June 21, 2008, the Plaintiff was found to have cultivated the instant orchard directly even in the fact-finding survey on the individual status of its members conducted by Nonghyup.

④ When transferring the instant orchard, the Plaintiff received compensation for losses for 15-year-old tree 71 weeks from the GATT, and separately confirmed that the Plaintiff actually cultivated the instant orchard from the date of acquisition to the time of transfer, and paid the Plaintiff the amount of compensation for farming losses.

3. Conclusion

The judgment of the first instance is revoked because it is unfair to conclude a different conclusion. The disposition of this case is revoked.