Seocho 2014west 160 (No. 23, 2014)

It shall not be deemed that a person has cultivated directly for more than 8 years and shall not be subject to reduction and exemption.

Article 66 (12) of the Enforcement Decree of the Restriction of Special Taxation Act cannot be deemed to have no provision on the basis of delegation, or to have exceeded the limit of delegated legislation, and it cannot be deemed that the direct cultivation, namely, the cultivation of crops or the growing of perennial plants, or the cultivation or cultivation of more than 1/2 of farming works with their own labor, does not constitute a category of eight-year cultivation.

Article 66 (12) of the Enforcement Decree of the Restriction of Special Taxation Act

2014Gudan13891 Revocation of Disposition of Imposing capital gains tax

KimA

BB Director of the Tax Office

March 18, 2015

April 8, 2015

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The Defendant’s disposition of imposition of KRW 00,000,000 on September 3, 2013 against the Plaintiff was revoked.

1. Details of the disposition;

A. On October 23, 1975, the Plaintiff acquired 4182 square meters prior to 000,000,000,000,000,000 (hereinafter “instant land”) and transferred the instant land to ○○○○○○○ Corporation on August 3, 201 as the instant land was incorporated into the site for the Bogeumjari Housing Construction Project in Seoul ○○2 District.

B. The Plaintiff, upon filing a preliminary return on the tax base of capital gains tax for the year 201 following the transfer of the instant land, directly cultivated the instant land for at least eight years, calculated the tax amount reduced or exempted by applying Article 69(1) of the former Restriction of Special Taxation Act (amended by Act No. 11133, Dec. 31, 201; hereinafter the same) as 200 million won, and reported and paid the capital gains tax.

C. On June 3, 2012, the Defendant: (a) deemed that the Plaintiff did not directly cultivate the instant land for at least eight (8) years; and (b) applied Article 77 of the same Act, on September 3, 2013, imposed KRW 00,000,000 upon the Plaintiff for the transfer of the instant land.

D. On December 6, 2013, the Plaintiff filed an appeal with the Tax Tribunal on the instant disposition, but was dismissed on June 23, 2014.

[Ground of recognition] Facts without dispute, Gap 3, 4, 8, 9, Eul 1 (including additional numbers), the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

Article 66(12) of the Enforcement Decree of the Restriction of Special Taxation Act (the "direct cultivation" means that a resident engages in cultivating crops or growing perennial plants on his own farmland at all times, or growing or growing at least 1/2 of farming with his own labor; hereinafter referred to as "the provisions of this case") which was newly established by Presidential Decree No. 19329 on February 9, 2006 is null and void because it violates the principle of no taxation without delegation by law or beyond the scope delegated by Article 69 of the former Restriction of Special Taxation Act. Therefore, the "direct farming" should not be determined by the provisions of this case, and the "direct farming" shall not be included in the "direct farming" where the plaintiff directly cultivates the land of this case under the plaintiff's account and responsibility for eight years or more while residing in the location of the land of this case or its adjacent area, and thus, the plaintiff did not directly obtain any tax reduction or exemption for the transfer income tax from the land of this case. Therefore, the decision that the plaintiff directly transferred the land of this case to the plaintiff.

B. Determination

(1) As to the assertion that the provision in this case is null and void, the Enforcement Decree of the Act or the Enforcement Rule of the Act cannot change or supplement the contents of rights and obligations of individuals or determine new contents that are not prescribed in the Act, unless otherwise delegated by the Act. However, the legislative purport of the Act or the Enforcement Rule of the Act is merely to stipulate the possibility of interpretation of the mother Act through an organic and systematic examination of the whole of the legislative purport of the mother Act and the relevant provisions, or if it is intended to embody them based on the purport of the provisions of the mother Act, it shall not be deemed to exceed the scope of the mother Act’s regulation. Thus, even if there is no provision directly delegated to the mother Act, it shall not be deemed null and void (see, e.g., Supreme Court Decision 2008Du13637, Jun

Article 69(1) of the former Restriction of Special Taxation Act provides that "The tax amount equivalent to 100/100 of capital gains tax shall be reduced or exempted with respect to income accruing from the transfer of land prescribed by Presidential Decree, among land directly cultivated by a resident prescribed by Presidential Decree who resides at the seat of farmland for not less than eight years." Article 66(13) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 23590, Feb. 2, 2012; hereinafter the same shall apply) provides that "direct cultivation" means that "a resident is engaged in cultivating crops or growing perennial plants on his/her own farmland or growing them with his/her own labor or cultivating them with not less than 1/2 of them with his/her own labor" (the same content as the provision of this case). Article 2 subparag. 5 of the Farmland Act provides that "a farmer is constantly engaged in cultivating crops or growing them with his/her own labor or growing them with not less than 1/2 of farming or perennial plants on his/her own farmland."

As above, Article 69(1) of the former Restriction of Special Taxation Act delegates a specific scope to Presidential Decree by declaring the land directly cultivated for at least eight years as eligible for exemption from capital gains tax, and Article 66(4) through (8) of the former Enforcement Decree of the Restriction of Special Taxation Act provides for the subject of exclusion from the farmland cultivated by himself/herself for at least eight years, and Article 2(5) of the same Enforcement Decree of the Restriction of Special Taxation Act provides for the same content as the self-regulation provision under Article 2 subparag. 5 of the Farmland Act, and the meaning of direct cultivation does not vary in itself pursuant to the instant provision. Thus, the instant provision does not have any provision on delegation or it does not constitute invalid provision as it goes beyond the limit of delegated legislation (see, e.g., Supreme Court Decision 2010Du8423, Sept. 30, 20

(2) As long as the provision of this case is valid, it is difficult to recognize that the evidence submitted by the Plaintiff itself directly cultivated the land of this case in light of the following circumstances, as to whether the Plaintiff was engaged in the cultivation of the crops or the growing or growing of perennial plants at least 1/2 of the crops or growing or growing them with his own labor. Accordingly, the disposition of this case is lawful.

① The Plaintiff served as a newspaper company from November 11, 1963 to November 30, 1996.

② From February 2002, the Plaintiff leased the instant land to ○○○○, and the ○○○○ Corporation paid compensation for obstacles to ○○○○○○.

③ The instant land is considerably larger than 4182 square meters, and it is difficult to deem that the Plaintiff, who has inconvenienceed physical size, directly cultivated one-half or more of the farming works with his own labor.

④ Even if the land excess profit tax was not imposed by the Land Excess Profit Tax Act that differs from the legislative purpose and requirements, the "direct farming" cannot be presumed.

3. Conclusion

Thus, the plaintiff's claim is dismissed as it is without merit.