Suwon District Court 201Guhap1574 ( October 17, 2011)

Cho High Court Decision 2010Du2594 ( November 11, 2010)

land for non-business use that is difficult to recognize the fact of self-reliance;

It is difficult to see that a person is engaged in the cultivation of crops directly from a place of residence or has cultivated not less than a half of the farming works with his own labor, and has received subsidies while cultivating farmland by another person residing in the vicinity of the transferred farmland and has been recognized as acceptable. Thus, it does not constitute self-arable farmland.

Article 69 of the Restriction of Special Taxation Act

Article 104-3 of the Income Tax Act

2011Nu31934 Revocation of disposition of imposing capital gains tax

XX Kim

The director of the tax office

Suwon District Court Decision 201Guhap1574 Decided August 17, 2011

March 27, 2012

May 4, 2012

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 Defendant’s disposition of imposing capital gains tax of KRW 000 for the year 2008 against the Plaintiff on January 6, 2010 is revoked.

1. Division of capital gains tax;

The following facts are either in dispute between the parties or in accordance with Gap evidence Nos. 1, 5, 6, 11, Eul evidence No. 1 (including additional numbers), Eul evidence No. 2 and the whole purport of the pleadings.

[1]

O The Plaintiff had been living together with her husband in from 1968 to 00 of the Seocho-si in Gwangju City. On February 19, 2000, the Plaintiff acquired and owned 00 m2,000 m2 (hereinafter “instant land”) and transferred the instant land to MaB on December 22, 2008.

On February 20, 2009, the Plaintiff filed a preliminary return on the tax base of transfer income accrued in 2008 with the transfer value of the land in this case as KRW 000 and the acquisition value as KRW 000, and applied for reduction or exemption of capital gains tax to the Defendant for direct cultivation under Article 69 of the Restriction of Special Taxation Act (amended by Act No. 9276, Dec. 29, 2008; hereinafter referred to as the “Special Taxation Act”).

[2]

O) On January 6, 2010, the Defendant rejected the Plaintiff’s application for reduction and exemption on the ground that the Plaintiff did not directly cultivate the instant land, and applied 60% of the heavy tax rate to the land for non-business use. On January 6, 2010, the Defendant corrected the transfer income tax for the year 2008 to the Plaintiff as KRW 000 (hereinafter “instant disposition”).

O The Plaintiff was dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on July 26, 2010 on April 2, 2010. However, the Tax Tribunal dismissed the appeal on November 11, 2010.

2. The plaintiff's assertion

The Plaintiff resided in the XXri-si in the Seocho-si, Gwangju City, from around 1968 to 1968, and was directly engaged in farming activities in the instant land for not less than 8 years after the acquisition of the instant land. Only for 20 years prior to the transfer of the instant land, her husband, EA, and EF had been assisted by her husband, EF only for 2 and 3 years prior to the transfer of the instant land. Furthermore, the Plaintiff was merely supported by staticCC, who resided in

Therefore, despite the fact that the Plaintiff’s direct cultivation of the instant land for a certain period does not constitute non-business land and includes the land subject to reduction or exemption of capital gains tax pursuant to Article 69(1) of the Restriction of Special Taxation Act, the Defendant’s disposition of this case, which was rendered without recognizing the

3. Determination

(a) Facts of recognition;

The following facts are acknowledged in light of the overall purport of the arguments in Gap evidence Nos. 2, 3, 7, 8, 12, and Eul evidence Nos. 3 through 5.

In the farmland ledger first prepared on March 21, 2001 with respect to the Plaintiff’s husband Lee, the Plaintiff’s husband owned 9,119 square meters in total, including 00-0 m22 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000,000 m2, which is his residence, for the farmland ledger, and registered as the owner of the land of this case in the said farmland ledger. However, the instant land owned by the Plaintiff is not indicated in the said farmland ledger.

OA has purchased fertilizers or agricultural chemicals from the first 2001.

O The Plaintiff’s residence is located in Gwangju City. The instant land is located in Ischeon City adjacent to Gwangju City, and the Plaintiff’s residence and the distance of the instant land are 23 km away from the straight line or used general means of transportation, the distance is more than 32 km and 50 km away from 32 km.

O) On March 17, 2010, the Plaintiff filed an application for direct payments compensating for rice income in 2005 or 2008 with respect to the instant land (hereinafter “direct payments”). The Plaintiff filed an objection against this prior to the instant disposition, the Plaintiff reported that Jungcheon-si and Jung-si filed an unjust receipt of subsidies on March 17, 2010, which was subsequent to the instant disposition.

O) During the first instance trial proceeding, the Plaintiff asserted that CC was aware of the fact that the pertinent tax disposition was unjustly received subsidies. However, the Plaintiff’s assertion was modified to the effect that the Plaintiff impliedly accepted subsidies in return for aiding and abetting the cultivation of the instant land, such as borrowing agricultural machinery.

B. Determination

We examine the plaintiff's argument based on the above evidence and the above facts of recognition as follows.

[1]

(1) The Income Tax Act (amended by Act No. 9270 of Dec. 26, 2008; hereinafter the same shall apply) stipulates that "farmland the owner does not reside in the location of the farmland or does not cultivate himself/herself as prescribed by Presidential Decree" shall be applied at the tax rate of 60/100 of the tax base of transfer income (Articles 104 and 104-3 (1) 1 (a)), the Enforcement Decree of the Income Tax Act shall be the same Si/Gun/Gu as the location of farmland, or Si/Gun/Gu adjacent thereto, where a person who has registered as a resident and actually resides in the area of Si/Gun/Gu is "farmland other than farmland the owner does not do so under the provisions of subparagraph 5 of Article 2 of the Farmland Act (Article 168-8 (2)).

In addition, Article 2 subparagraph 5 of the Farmland Act provides that a farmer is constantly engaged in the cultivation of crops or the growing of perennial plants in his/her own farmland, or that an agricultural corporation cultivates crops or cultivates perennial plants in its own farmland (Article 2 subparagraph 5 of the Farmland Act). The Enforcement Rule of the Farmland Act provides that a farmer is "a farmer who cultivates crops or cultivates perennial plants in his/her own farmland (Article 4 subparagraph 1 of the Farmland Act) or in any other similar case where the Mayor, the head of the Gu, the head of the Eup, or the head of the Eup, or the head of the Myeon recognizes it (Article 4 subparagraph 2 of the same Act).

(2) Meanwhile, the Restriction of Special Taxation Act provides that the tax amount equivalent to 100/100 of the transfer income tax shall be reduced or exempted on the income accruing from the transfer of land prescribed by the Presidential Decree among the land which is subject to the taxation of agricultural income tax by a resident prescribed by the Presidential Decree who resides in the location of the farmland for not less than eight years (the main sentence of Article 69(1)), the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 21307, Feb. 4, 2009; hereinafter the same shall apply), and the Si where farmland for not less

Article 6 (1) 1) and 1 of the Gu area (Article 66 (1) of the Si/Gun/Gu area (Article 66 (2) 2) and a person (Article 1) who has resided in an area falling under any of the areas (Article 26 (3) within a straight distance of 20 kilometers from the farmland in a straight line) and has cultivated agricultural products or perennial plants on his/her own farmland for at least eight years or who has cultivated or cultivated them with his/her own labor for at least half of farming work (Article 66 (1) 1).

(3) Examining the Plaintiff’s assertion in light of the above facts and relevant Acts and subordinate statutes, it is evident that the Plaintiff owned the instant land which is farmland for not less than 8 years and transferred it to another party, and the Plaintiff was residing in Gwangju City adjacent to the village in which the instant land is located. Therefore, the key issue of the instant case is whether the Plaintiff directly cultivated the instant land for not less than 8 years, and if so, whether the Plaintiff was engaged directly in cultivating crops or perennial plants in the instant land or cultivated or cultivated not less than 1/2 of the farming work with his own labor.

[2]

(1) The preparation of the farmland ledger and the contents thereof can be deemed as important evidence to determine whether farmland is self-defluence. However, in the farmland ledger (Evidence A 2) prepared with respect to the eight parcels located XX located in the Seocho-gu Seoul Special Metropolitan City owned by the Plaintiff’s husband, the Plaintiff’s husband stated that thisA is a self-defluence of 8,335 square meters in total among seven parcels, but there is no evidence to support that the entry of the instant land owned by the Plaintiff, the wife, was not possible, and that the farmland ledger was separately prepared for the instant land owned by the Plaintiff.

(2) It is reasonable to view that the Plaintiff himself argued that he had been a rice farmer for a period of several hundreds, and that he was her husband, who was the husband, was aware of the fact that he could receive subsidies for rice farming companies enforced in 2005 or 2008, which were enforced in the year 2008. However, the Plaintiff’s argument in the first instance trial that the Plaintiff, who was aware of the fact that he had received subsidies for the instant land under his name from 2005 to 2008, had known that he had received subsidies for the instant land from 2005 to 2008. However, it is difficult to accept the Plaintiff’s argument in the first instance trial that he reported the fixedCC as an unjust receipt of subsidies due to the fact that he had known of the fact after the instant disposition was taken.

On the other hand, the plaintiff changed his argument to the purport that he had silented it as a price for aiding the cultivation of the land in this case with the knowledge of the receipt of the subsidies from the regularCC for the first time. The plaintiff's argument in the first instance and the trial is incompatible with each other, and according to the latter's argument, it may be deemed that a third party, not the plaintiff, was involved in the cultivation of the land in this case.

(3) The fact that thisA had purchased fertilizers and agrochemicals from January 2001, but there was no data that the Plaintiff purchased fertilizers and agrochemicals in the name of the Plaintiff, and since the Plaintiff’s residence and the distance of the land in this case seems to be too far away from approximately 50 minutes, it is difficult to deem that the Plaintiff, a woman over 60 years old at the time of the acquisition of the land in this case, had moved to possess fertilizers and agrochemicals necessary for the cultivation of the land in this case, and there was no evidence to deem that the Plaintiff used fertilizers and agrochemicals purchased from the agricultural cooperative in thisA’s name for the cultivation of the land in this case. Since it appears that JungCC, who was not the owner of the land in this case, took subsidies in this name while participating in the cultivation of the land in this case, appears to have been paid for the cultivation of the land in this case, there was no need for the Plaintiff to separately use fertilizers and agrochemicals for the cultivation of the land in this case at its own expense, it appears that there was no need for the Plaintiff to use the farmland in its neighboring farmland.

(4) In light of the above, the Plaintiff is confirmed to have accepted subsidies from the competent authorities while cultivating the instant land, not directly engaged in the cultivation of crops in the instant land located within a long distance from the residence, or by using not less than a half of farming works with his own labor, but by the JungCC, which had a residence in the instant land near the instant land, while cultivating the instant land. The Plaintiff was aware of the receipt of the said subsidies.

(5) As to this, the Plaintiff asserted that the fertilizer or agricultural chemicals required to cultivate the land of this case, either directly or by her husband, and together with EF, were purchased and used in cooperation with her family members, and that they were lent from nearby farmers in the area of the land of this case, such as ED only to the extent of the agricultural machinery. However, the testimony of EE by the first instance court, which seems consistent with the Plaintiff’s above assertion, is difficult to be easily believed, and it is insufficient to recognize it solely with the descriptions of the evidence No. 3 and No. 6, and it is difficult to find other materials to view that the Plaintiff actually cultivated the land of this case. Thus, the ratification that the Plaintiff did not directly cultivate the land of this case shall not be reversed.

[3]

(1) If so, the plaintiff cannot be deemed to have done a self-cultivation of the land of this case. As seen above, Article 104-3 (1) 1 (a) of the Income Tax Act and Article 168-8 (2) of the Enforcement Decree of the same Act stipulate as one of the "land for non-business use" excluding farmland being self-arable under subparagraph 5 of Article 2 of the Farmland Act, and "direct cultivation" under the above provision and Article 69 (1) of the Restriction of Special Taxation Act and Article 66 (12) of the Enforcement Decree of the Restriction of Special Taxation Act are practically the same contents. Thus, the land of this case does not fall under the category of "self-arable cultivation" under the Restriction of Special Taxation Act and the Enforcement Decree of the Restriction of Special Taxation Act, and thus, it does not fall under the category of "non-business land" as well as "non-business land under the Income Tax Act and the Enforcement Decree thereof. Therefore, the transfer gains tax rate and gains tax rate shall apply to the land of this case.

(2) Therefore, the Defendant’s disposition imposing capital gains tax on the Plaintiff by applying the heavy taxation rate of 60% to the transfer of the instant land is lawful.

3. Conclusion

Therefore, the plaintiff's claim seeking the revocation of the disposition of this case shall be dismissed as it is without merit, and the judgment of the court of first instance is just in its conclusion, and the plaintiff's appeal is dismissed. It is so decided as per Disposition.