Daegu District Court-2017-Gu Partnership-24822 (No. 21, 2018)

Cho Jae-2017-Gu-3436 ( dated 28, 2017)

Article 66 (14) of the Enforcement Decree of the Restriction of Special Taxation Act ("the Restriction of Special Taxation Act") stipulates that Article 69 (1) of the Restriction of Special Taxation Act is delegated to the

Article 66 (14) of the Enforcement Decree of the Restriction of Special Taxation Act provides for the provision of Article 66 (4), (6), (11) and (12) of the former Enforcement Decree of the Restriction of Special Taxation Act, based on the delegation provision of "land prescribed by Presidential Decree among the land cultivated by a resident prescribed by Presidential Decree residing in the location of a farmland for at least eight years" in the main sentence of Article 69 (1) of the Restriction of Special Taxation Act,

Article 66 of the Enforcement Decree of the Restriction of Special Taxation Act (Abatement or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

Daegu High Court-2018-Nu-3722

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○ Head of tax office

October 19, 2018

November 09, 2018

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. On May 1, 2017, the imposition of capital gains tax of KRW 67,933,520 against the plaintiff shall be revoked.

1. Quotation of judgment of the first instance;

The reasoning for this Court’s explanation concerning this case is as follows, except for the addition of the judgment of the first instance court No. 4, No. 18, and No. 19 to the following arguments, and therefore, the reasoning for this Court’s explanation is the same as the part of the reasoning for the first instance judgment. Thus, it is acceptable in accordance with Article 8(2) of the Administrative Litigation Act, and the main text of

2. Details to be added; and

The plaintiff argues that Article 69 (1) of the former Enforcement Decree of the Restriction of Special Taxation Act (hereinafter "the former Enforcement Decree of the Restriction of Special Taxation Act") which is the mother of Article 66 (14) of the former Enforcement Decree of the Restriction of Special Taxation (hereinafter "the provisions of this case") delegates to the Enforcement Decree of the Restriction of Special Taxation Act concerning residents, farming methods, land, etc., and that the provision of this case is excluded from the period of cultivation of residents without the delegation of the mother law.

However, the legislative purpose of Article 69 of the former Restriction of Special Taxation Act is to reduce the tax burden following the transfer of farmland as part of the land policy. In particular, the purpose of Article 69(1) of the same Act is to delegate the Presidential Decree so that a person subject to exemption may be able to be flexibly determined in accordance with changes in the land policies by preventing out-of-land speculation and reducing the tax burden of self-employed farmers for not less than eight years. Such preferential measures for tax reduction and exemption are against the principle of tax equality and the waiver of financial resources of the State or local governments, and it is not desirable to reduce the scope thereof. Therefore, if it is necessary to achieve the policy objective, it should be exceptionally permitted within the extremely limited scope by strictly stipulating the requirements of a person subject to exemption. Article 69(1) of the former Restriction of Special Taxation Act is limited to "land prescribed by Presidential Decree among land cultivated directly by Presidential Decree for not less than eight years," and the purpose of Article 29(2) of the same Act is to specifically determine the scope of individual exemption and exemption in accordance with Presidential Decree.

In light of such legal principles and the following circumstances revealed by relevant statutes, the instant provision provides that “land prescribed by Presidential Decree among land cultivated directly by means prescribed by Presidential Decree for not less than eight years” under the main sentence of Article 69(1) of the former Restriction of Special Taxation Act shall be added to the criteria for self-sufficiency of land eligible for capital gains tax reduction and exemption, and its income standards cannot be deemed null and void without delegation of the parent law or beyond the limits of delegated legislation (see Supreme Court Decision 2017Du7390, Mar. 29, 2018; Supreme Court Decision 2017Nu56423, Nov. 15, 2017). The Plaintiff’s above assertion cannot be accepted.

① Article 69(1) of the former Restriction of Special Taxation Act clearly states that a resident prescribed by Presidential Decree residing in a location of a farmland who has been directly cultivated for not less than eight years by means prescribed by Presidential Decree shall be exempted from capital gains tax only for the transfer of land prescribed by Presidential Decree among “transfer of land” among “land cultivated by the means prescribed by Presidential Decree for not less than eight years,” and it is insufficient to stipulate special cases for exemption from capital gains tax for eight years only by satisfying the requirements for exemption from capital gains tax. In addition, taking into account the legislative purpose of the aforementioned provision and the limited scope of preferential measures for tax reduction and exemption for agricultural protection and support, it can be easily predicted that the provision that capital gains tax may be exempted in accordance with Presidential Decree is limited to cases where “transfer of land directly cultivated for not less than eight years and that is subject to taxation of capital gains tax” (see, e.g., Supreme Court Decision 2003Du4034, Dec. 9, 2004).

② Considering the unique characteristics of agricultural work, which is a representative labor-intensive production activity, as well as the need for many efforts, time, and input of labor force in order to cultivate crops as living things, it is practically difficult for a person with an occupation that obtains 37 million won in total amount of total wage, etc. to put in the above labor force, but even if possible, it rather accords with the need for a land farming policy.

③ Comprehensively taking account of the foregoing circumstances, based on the delegation provision of Article 66(4), (6), (11), and (12) of the former Enforcement Decree of the Restriction of Special Taxation Act, the provision of this case is prepared within the foreseeable delegation scope, based on the delegation provision of “land prescribed by Presidential Decree among the land cultivated by a resident prescribed by Presidential Decree residing in the location of a farmland for at least eight years” under the main sentence of Article 69(1) of the same Act.

3. Conclusion

Therefore, the plaintiff's claim of this case shall be dismissed as it is without merit. The judgment of the court of first instance is just as it is concluded, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.