Cho-2016-China-1622 (Law No. 15, 2016)

Prohibition or restriction of planting standing timber or felling, etc. shall constitute special restrictions on the use of forest land.

The prohibition or restriction of planting, felling, cutting, etc. of standing timber on forest land is highly likely to constitute a case where the use is specially restricted beyond the ordinary limit according to the use of land. Therefore, it constitutes land not deemed land for non-business use.

Scope of land for non-business under Article 104-3 of the Income Tax Act

OO District Court 2016Guhap53412 Revocation of Disposition of Refusal of Correction of Transfer Income Tax

OO

OO Head of the tax office

June 1, 2017

August 10, 2017

1. The Defendant’s disposition rejecting the reduction or correction of KRW 1,694,781,651 out of the transfer income tax for the year 2015 reverted to the Plaintiff on October 12, 2015 is revoked.

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. On August 20, 1984, the Plaintiff acquired and owned OO-dong O-dong O-dong 361, 361-1, 361-2, 361-3, 361-4, 361-4, 363, 363-1, 363-2, 363-3, 363-3, 363-4, 363-2, 200, 363-4, 11, and 209,652 square meters (hereinafter referred to as "the forest of this case") in total, and sold the forest of this case to OO-dong 361, 361-1, 361-2, 361, 361-3, 361, 361-3, 361, 282, 250 at the time of reporting and paying it (hereinafter referred to as "the forest of this case").

B. According to a land use plan confirmation, the instant forest is designated as a natural green area, quasi-preserveded uninhabited island, quasi-preserveded mountainous district, etc. In accordance with the Act on the Conservation and Management of Uninhabited Islands (hereinafter “Uninhabited Islands Act”), the instant forest was designated and publicly announced as an uninhabited island with quasi-Preservation on December 4, 2012 (uninhabited island where measures to restrict certain acts are required due to high value of conservation of uninhabited islands).

C. From March 26, 2011 to December 8, 2013, with respect to the instant forest, Article 8-2 and Article 8-1 of the former Special Act on Designation and Management of Free Economic Zones (amended by Act No. 10529, Apr. 4, 2011; hereinafter “former Free Economic Zone Act”) was prohibited from felling and planting bamboo according to the policy by the head of the Free Economic Zone Authority of the OO Metropolitan City (amended by Presidential Decree No. 23068, Aug. 5, 201) and Article 6-2 of the former Enforcement Decree of the Free Economic Zone Act (amended by Presidential Decree No. 23068, Aug. 5, 201) and Article 12 of the Uninhabited Islands Act from December 4, 2012 to December 8, 2012.

D. On August 12, 2015, the Plaintiff: (a) claimed that the instant forest land was excluded from idle land pursuant to Article 104-3(2) of the former Income Tax Act (amended by Act No. 13426, Jan. 25, 2016); and (b) claimed that it would be subject to special long-term holding deduction; and (c) filed a claim for correction to request the Defendant to reduce KRW 1,694,781.651 of the said capital gains tax; (d) on October 12, 2015, the Defendant rejected the said claim on the ground that the protection and fostering of the forest, the original purpose of which is forest, was not prohibited or restricted (hereinafter “instant disposition”).

E. Although the Plaintiff filed an objection on January 8, 2016, the Plaintiff was dismissed on February 19, 2016, and the Plaintiff filed a tax appeal on April 18, 2016, but was dismissed on July 15, 2016.

2. Whether the instant disposition is lawful

A. Summary of the Plaintiff’s assertion

The forest of this case is the quasi-preserved mountainous district of the Mountainous Districts Management Act and the Gu until the date of the transfer thereof.

Article 168-9 (1) 2 (a) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 26922, Jan. 22, 2016; hereinafter the same) provides that a forest management plan is approved pursuant to the Creation and Management of Forest Resources Act (hereinafter referred to as the “Forest Resources Act”) and does not engage in the business. However, with respect to the forest of this case, the forest of this case is subject to the restriction on the use of the forest of this case for the original purpose of the forest of this case as it is impossible to obtain approval of the forest management plan due to the prohibition or restriction of felling, planting, etc. of bamboo and trees under the former Free Economic Zone Act or the Uninhabited Islands Act, etc., and the use of the forest of this case is prohibited or restricted after the acquisition of the land under Article 168-14 (1) 1 of the former Income Tax Act. Accordingly, the special deduction for long-term possession should be applied to the plaintiff. Thus, the disposition of this case should be revoked.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Whether Article 104-3(2) of the former Income Tax Act is applicable

Article 104-3 (1) of the former Income Tax Act provides that "land for non-business use" in Articles 96 (2) 8 and 104 (1) 8 means land falling under any of the following subparagraphs for a period prescribed by Presidential Decree during the period of possession of the relevant land, and Article 104 (2) provides that "where such land falls under any subparagraph of paragraph (1) due to prohibition of use of the land by law after acquisition or other inevitable reasons prescribed by Presidential Decree, such land may not be deemed land for non-business use, as prescribed by Presidential Decree."

However, paragraphs 1, 2, and 4 above are excluded from land for non-business use, i.e., land excluded from land for non-business use under any of the following items, i.e. land for non-business use, and Article 1, 3, 5, 6, and 7 designate "those falling under any of the following items" and take the form of determining non-business land under each item:

In the application of the above Paragraph 2 to the above Paragraph 1 Paragraph 2, since "each subparagraph" refers to the land for business, not the land for non-business use, the above Paragraph 2 does not apply to the forest land, i.e., the above Paragraph 1 Paragraph 2.

Article 104-3 (2) of the former Income Tax Act stipulates that land falling under any of the following items among land shall be defined as land for non-business use, and land falling under each item shall be excluded from land for non-business use in principle, but land falling under each item exceptionally shall be excluded from land for non-business use in exceptional cases where there are statutory restrictions or inevitable reasons. In addition, the provisions of Article 168-14 of the former Enforcement Decree of the Income Tax Act and Article 83-5 of the Enforcement Rule of the Income Tax Act, which are delegated by Article 104-3 (2) of the former Income Tax Act, shall not be regarded as land for non-business use. In addition, the provisions of Article 104-3 (1) 1, 3, 5, 6, and 7 of the same Act stipulate that land falling under any of the following items shall be excluded from land for non-business use.

Considering the above legislative intent and the method of regulation as a whole, it is reasonable to view that the above paragraph (2) applies to “forest land, which is a non-business land, as provided in paragraph (1) 2, in an organic and systematic interpretation of the relevant Acts and subordinate statutes.” Therefore, the defendant’s above assertion is not acceptable.

(2) Whether Article 104-3 (2) of the former Income Tax Act applies

㈎ 관련 법리

The term “land, the use of which is prohibited or restricted pursuant to Article 104-3(2) of the former Income Tax Act and Article 168-14(1)1 of the former Enforcement Decree of the Income Tax Act” means land, the use of which is specially restricted beyond the ordinary limit according to its use. Here, it is reasonable to view that “where the use of which is specially restricted beyond the ordinary limit according to its use” includes not only the land directly prohibited or restricted by statutes, but also the land practically prohibited or restricted by an administrative agency as part of an administrative action, including building permission, etc. as part of the administrative action (see, e.g., Supreme Court Decision 2011Du1425, Oct. 31, 2013). Moreover, whether it falls under the foregoing, it shall be based on the principle of restriction on the use of the land according to its original purpose, but also on an individual basis, such as the purpose of acquisition of the land, the actual use status, and the possibility of changing its original use (see, e.g., Supreme Court Decision 20

㈏ 검토

1) Whether or not to prohibit or restrict use by law or administrative action (administrative control)

According to the facts and the purport of paragraph (1) above, the facts and the purport of paragraph (1) as stated in Section B and Section B 4, it is recognized that the forest of this case is limited to the extent that the alteration of the form and quality of land, the cutting of bamboo trees, and the cutting of planting trees, etc. do not impede development projects and damage natural landscape, and it is prohibited by the Uninhabited Islands Act and subordinate statutes from December 4, 2012 to May 11, 2015, which is the date of the transfer of the forest of this case.

2) Actual status of use

The fact that the forest land in this case is a land where standing timber, etc. is collectively growing, and a forest is forming a forest, can be acknowledged by comprehensively taking account of the purport of the entire arguments and arguments. Therefore, the forest land in this case is "forest" as provided by Article 67(1) of the Spatial Data Construction and Management Act and Article 58 of the Enforcement Decree of the same Act, which is "forest" as provided by Article 2 of the Forest Resources Act and "forest" as provided by Article 2 of the former Mountainous Districts Management Act (amended by Act No. 14361, Dec. 2, 2016) and the actual use status is also a forest (forest).

(iii) the original purpose of the land;

The original purpose of land is to be registered on the public register (see the above 2014Du7886, supra). The land category and current status of the instant forest are both forests. Meanwhile, even if the original purpose of forest land is disputed, the Defendant’s assertion that the original purpose of forest land is to protect and develop forests, it is difficult to deem that the term “dition of standing timber” does not include the original purpose of forest land. Furthermore, according to relevant Acts and subordinate statutes, such as the Mountainous Districts Management Act, the original purpose of forest land includes felling and mining related to the production of forest trees, etc. in addition to planting of standing timber, etc., and the original purpose of forest land is to use the forest land for purposes other than afforestation, forest tending, felling and extracting standing timber, etc., and to change the form and quality of the mountainous district to this end, and the original purpose of the forest land can be interpreted as including the deforestation and extraction of standing timber, etc., and Article 3 of the Enforcement Decree of the Mountainous Districts Management Act, which is suitable for the improvement of productivity of forest production.

However, it is difficult to readily conclude that, just because it is difficult for the owner of forest land to obtain "authorization of forest management plan" under the Forest Resources Act, such as the Plaintiff's assertion, the use of forest land for its original purpose, such as planting and felling standing timber itself, has been prohibited

4) Sub-determination

Ultimately, in light of the relevant legal principles, there is a lot of room to view that the prohibition or restriction of planting or cutting of trees of the instant forest constitutes a case where the use of the instant forest is restricted beyond the ordinary limit according to the use of the land. In the instant case where the possession period of the instant forest is more than five years, the instant forest during the period from March 26, 2011 to May 11, 2015, which is specially restricted, falls under Article 104-3 of the former Income Tax Act, and the instant forest falls under the land not deemed the land for non-business use under Article 104-3 of the former Income Tax Act, and Article 168-14 of the former Enforcement Decree of the Income Tax Act, and the instant forest does not fall under the land for non-business use under Article 104-3 of the former Income Tax Act, and Article 168-6 of the former Enforcement Decree of the Income Tax Act. Therefore, the

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is so decided as per Disposition.