The calculation of acquisition value and necessary expenses of the land of this case is lawful, and there is no evidence to prove that the plaintiff has self-recovered from the land of this case

The acquisition value of the high-priced land purchased from a person with a special interest is the evaluation amount under the Inheritance Tax and Gift Tax Act, and the plaintiff failed to present evidence on the necessary expenses and there is insufficient evidence to recognize the self-employed around eight years, so the disposition of this case

Article 101 (Calculation of Capital Gains by Wrongful Acts)

2017Gudan5117 Revocation of Disposition of Imposing capital gains tax

GaO

OO Head of the tax office

November 29, 2017

January 17, 2018

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 capital gains tax of KRW 86,895,910 for the Plaintiff on December 10, 2015 shall be revoked.

1. Details of the disposition;

A. On June 30, 1998, the Plaintiff acquired and possessed 208-2 2,404 square meters (hereinafter collectively referred to as “the instant farmland”) of O-Myeon O-si O-si O-si O-si O-si 230,405 square meters, and sold 290,000,000 won to SouthB on June 11, 2013, and completed the registration of ownership transfer on June 18, 2013.

B. On August 30, 2013, the Plaintiff filed a transfer income tax on KRW 363,00,000 with the acquisition value of the instant farmland as KRW 363,00,00. The Defendant deemed that the Plaintiff acquired high-priced farmland from a specially related person, and corrected the acquisition value as KRW 60,516,456, and the Plaintiff did not meet the requirements for reduction and exemption of the instant farmland for eight years on the ground that there was separate earned income and the fact that the farmland in this case was made by proxy to another person was confirmed. Accordingly, on December 10, 2015, the Plaintiff corrected and notified the Plaintiff of KRW 86,895,910 for the transfer income tax for the year 2013 (hereinafter “instant disposition”).

C. The Plaintiff appealed and filed an objection on March 14, 2016, but was dismissed on April 22, 2016, and filed an appeal with the Commissioner of the National Tax Service on July 25, 2016, but was dismissed on November 21, 2016.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 9, 10, 11, Eul evidence Nos. 1 through 3 (including branch numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) Acquisition value:

The burden of proving the market price at the time of the acquisition of the farmland in this case is the defendant, and the defendant, without any proof, considered 46,551,120 won as the market price at the market price and acquired it at a higher price than that at the same time from the related party. However, it is unlawful to regard the above officially announced land price as the market price even if the right to collateral security was established at the time of acquisition,

(2) Necessary expenses

The defendant did not recognize at all necessary expenses from the acquisition tax borne by the plaintiff or from the estimated deduction.

(3) 8 years old police officer;

Until the transfer of the farmland of this case, the Plaintiff owned approximately 15 years a volume of farmland and cultivated crops by inserting more than 1/2 of the direct labor force while residing in the area adjacent to the farmland location. Thus, it is reasonable to deem that the Plaintiff met the requirements for reduction and exemption of capital gains tax under Article 69 of the former Restriction of Special Taxation Act. However, the Defendant’s disposition of this case on a different premise is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Determination on the assertion of acquisition value

Where assets are purchased at a price higher than the market price from a related party, the appraised price under the Inheritance Tax and Gift Tax Act may be deemed the market price and the acquisition price shall be deemed the market price (Article 167(3) and (5) of the former Enforcement Decree of the Income Tax Act). In such a case, the officially assessed individual land price under the Public Notice of Values and Appraisal of Real Estate Act shall be deemed the acquisition price under the Public Notice of Values and Appraisal of Real Estate Act (Article 61(1)1 of the Inheritance Tax and Gift Tax Act), and where the value calculated by subtracting the market price from the price is at least 30/100 of the market price, the value equivalent to 30/100 of the market price shall not be deemed the profit accrued from the high-priced acquisition (Article 26 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act). According to Article 26(3) of the Inheritance Tax and Gift Tax Act, the officially assessed individual land price of the farmland of this case at the time when the Plaintiff acquired the farmland of this case was recognized as 9,680 won, 501/65061/61 of the Plaintiff.

(2) Determination on the assertion of necessary expenses

In a lawsuit seeking revocation of a disposition imposing income tax, the burden of proof on the tax base, which is the basis of taxation, is on the tax authority, and the tax base is deducted from necessary expenses, so the tax authority should bear the burden of proof on revenue and necessary expenses in principle. However, since most of the facts that generated necessary expenses are in the sphere under the control of the taxpayer, and the tax authority is difficult to prove, it accords with the concept of fairness where it is reasonable to allow the taxpayer to prove the burden of proof in consideration of the difficulty of proof or equity between the parties (see, e.g., Supreme Court Decision 2006Du16137, Oct. 26, 2007).

However, the plaintiff does not present any evidence on the necessary expenses that correspond to his/her own assertion, and thus, the plaintiff does not accept this part of the claim.

(3) Determination as to the assertion of self-defense in 8 years

(A) Legislative purpose of the Act on Reduction and Exemption of Transfer Income Tax for Self-Cultivating Farmland

Article 69(1) of the former Restriction of Special Taxation Act provides that a tax amount equivalent to 100/100 of capital gains tax shall be reduced or exempted on income accruing from the transfer of land cultivated directly by a resident prescribed by Presidential Decree who resides in the farmland area for not less than eight years by means prescribed by Presidential Decree. The legislative purpose of this provision is to promote agriculture and rural communities by preventing the speculation of farmland in the outer land in accordance with Article 121(1) of the Constitution, which declares the principle of light-to-land freedom as the State's duty in order to liquidate the tenant system, which is a major legal relation, and to eliminate the inefficiency of the use of farmland caused by the absence of such system.

(B) The meaning of "direct cultivation"

Article 69 (1) of the former Restriction of Special Taxation Act (amended by Act No. 4666 of Dec. 31, 1993) provides that the term "direct farming", which is defined as the requirement for reduction or exemption of capital gains tax, has been used in the law, and since the above amendment, the term "direct farming" has been continuously used until the date of the amendment, but the term "direct farming" has been newly established in the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 19329 of Feb. 9, 2006). Article 66 (12) of the same Enforcement Decree of the same Act provides that "direct farming" means that a resident is engaged in cultivating or cultivating crops or perennial plants on his own land, or cultivating or cultivating them with his own labor, not less than 1/2 of them after the date of entry into force. In addition, the above Enforcement Decree provides that the term "direct farming" means cultivating or cultivating them with his own labor, even if it directly engages in other occupation, it cannot be deemed that it constitutes a new occupation (see Supreme Court Decision 20120.

In full view of the introduction of the term "direct farming" and the developments leading up to the establishment of the definition provisions, and the legislative purpose of the regulations on reduction and exemption of capital gains tax on self-Cultivating farmland as seen earlier, the term "direct farming" under Article 69 (1) of the former Restriction of Special Taxation Act is a concept to realize the legislative purpose of "direct farming" as a concept to realize the legislative purpose of preventing the speculation of farmland in non-owned land and reducing the tax burden of self-employed farmers for not less than 8 years, and thereby, it is necessary to directly input of more than 1/2 of the farmers and the farmland in the place, time (on a regular basis) or one-half or more of them. Accordingly, it should be excluded from capital gains tax reduction and exemption if the owner of farmland employs another person with occupation other than agriculture and cultivates the farmland on a intermittent basis only while cultivating the farmland.

(C) Whether the Plaintiff directly cultivated the farmland of this case

As evidence consistent with the plaintiff's assertion, Gap evidence Nos. 3 through 5, 12 through 15, and 18 (each farmland ledger, each O agricultural cooperative's certificate, each O agricultural cooperative's certificate, a certificate of cultivation by static residents, a certificate of acting for cultivation in the name of JungCC, and a certificate of Domination of rice) were prepared only on July 27, 2009, and associate members entered the farmland ledger only on April 9, 2012, and purchased three cases in 2012 and one case in 2013 (the purchase of farmland as of April 9, 2012 is deemed to have been cancelled on the day), and it is insufficient to prove that 20 years or more have passed since 20 days since 20 days have passed since 30 days have passed since 198, the plaintiff's certificate of Domination of land was actually prepared on the 9th day of 20th day of June, 198.

Rather, in full view of the following circumstances, the Plaintiff’s labor force directly invested does not reach 1/2.

The plaintiff worked as a local public official from July 1, 1978 and from July 1, 1988 to July 2013, 201, the farmland ownership of this case was commenced by the OO-gu Office. The plaintiff's main business is a public official, and the farming work in the farmland of this case is merely an incidental duty.

The plaintiff resided in the Seoul OO-gu and moved into the O-dong 685-68 only on August 12, 2005. While the above dwelling area is adjacent to the O-si where the farmland in this case is located, the moving time to the farmland in this case is a distance that requires approximately one hour to be used as a vehicle, and it is likely that the plaintiff who is a public official is unable to set the agricultural house on the ordinary day.

According to the above agency confirmation and fact-finding confirmation (No. 13 and 18 of the above Gap) submitted by the plaintiff, "YCC" means every year the plaintiff received user fees and personnel expenses from farming organizations, Tracker, transferer, spreader, and compacter work, etc., and all farming organizations are modernized and mechanicalized so that they can stop for farming, it is only seven hours in total for farming, fembling, gathering, spreading agricultural chemicals, and drilling work, which are not in the farmland in this case, and if the above circumstances are the same, it means the whole process of rice farming work, and therefore, the plaintiff is deemed to have entrusted most of the farmland in this case to YCC.

The plaintiff asserts that he puts his work force by using the weekends on the five-day work day per week. In addition, the plaintiff's work, other than the work of JungCC, shall be a fertilizer cycle, water atmosphere, water deduction, etc., and the plaintiff's work shall not be conducted only on the weekends due to the nature of the rainfall that should be done from time to time according to the water atmosphere and the amount of sunshine, and therefore, it is difficult to view that the plaintiff puts his work force on the part of the plaintiff, even if the plaintiff made a fertilizer cycle, even if he did so, at least 1/2 of the total farming work.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.