Daegu District Court 2017Guhap24556 (Law No. 17, 2018)

Since the imposition of capital gains tax cannot be recognized for 8 years of farmland, it is legitimate to impose capital gains tax.

Since the testimony, entry in the confirmation document of facts, and other evidence submitted by the witness cannot only recognize the fact of the farmland for 8 years, the disposition imposing capital gains tax is legitimate.

Article 69 of the Restriction of Special Taxation Act (Reduction or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

2018Nu4299 Revocation of Disposition of Imposing capital gains tax

Park XX

O Head of tax office

8.17

November 30, 2018

December 21, 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. The Defendant’s disposition of imposing capital gains tax of KRW 108,736,080 to the Plaintiff on July 1, 2017 shall be revoked.

1. Details of the disposition;

A. On July 28, 2005, the Plaintiff purchased 84,500,000 square meters of the instant farmland from OO-gun PPri 1203 PPri, O-gun, O-si, O-si (hereinafter “instant farmland”). On April 3, 2015, the Plaintiff sold the instant farmland to BB for KRW 458,000,000.

B. On April 30, 2015, the Plaintiff filed an application for reduction or exemption of capital gains tax pursuant to Article 69 (Reduction or Exemption of Capital Gains Tax for Self-Cultivating Farmland) of the Restriction of Special Taxation Act (amended by Act No. 13560, Dec. 15, 2015; hereinafter the same) with the Defendant on a preliminary return of KRW 82,947,657 following the transfer of the farmland in this case.

C. The Defendant conducted a field investigation on the farmland of this case from February 22, 2017 to March 13 of the same year, and conducted a tax investigation on the Plaintiff from April 5 to March 24 of the same year.

D. As a result of the above on-site investigation and tax investigation, the Defendant recognized that the Plaintiff cannot be deemed to have cultivated the instant farmland directly for at least eight years, and notified the Plaintiff of KRW 108,736,080 for the transfer income tax accrued in July 1, 2017 (hereinafter “instant disposition”).

E. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on August 23, 2017, but the appeal was dismissed on November 13, 2017.

Facts without any grounds for recognition, Gap evidence 1 through 4, Eul evidence 1 and 2, the purport of the whole pleadings, and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff directly cultivated rice from July 28, 2005 to February 2, 2009 (the Plaintiff asserted that he directly cultivated rice in the farmland in this case from the first instance to February 2010, but the previous assertion was made in error and that he directly cultivated rice in the farmland in this case was until February 2009). Since the Plaintiff directly cultivated rice and posium for not less than eight years from the farmland in this case, such as directly cultivating posium until sale of the farmland in this case, until sale of the farmland in this case, the transfer income tax on the farmland in this case should be reduced or exempted in accordance with Article 69(1) of the Restriction of Special Taxation Act. Accordingly, the disposition in this case on a different premise should be revoked since it is unlawful.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

(attached Form omitted)

C. Facts of recognition

The following facts may be acknowledged in light of the above evidence, Gap evidence Nos. 5 through 17 (including each number, hereinafter the same shall apply), Eul evidence Nos. 3, 4, and 5, and the purport of the whole pleadings.

1) 원고는 1968. 10. 20.경부터 1998. 6. 12.경까지 QQ리 317번지에서 거주하였고, 1998. 6. 12.경 이후에는 OO시 OO군 RR읍 S리 803-4번지 및 같은 읍 T리 3길 18번지에서 각 거주하였다. QQ리 317번지는 이 사건 농지와 약 5km 떨어져 있고, 위 S리 803-4번지 및 T리 3길 18번지는 이 사건 농지와 약 9km 떨어져 있다.

2) Since 1994, the Plaintiff operated a restaurant, an entertainment drinking club, a phrase store, etc. as shown in attached Table 1, and filed an annual comprehensive income tax return as shown in attached Table 2 as follows.

(Omission of List)

3) 원고는 다음 [표 3]과 같이 이 사건 농지를 비롯하여 총 6필지의 농지를 단독으로 소유하거나 다른 사람과 공유하고 있다.1) 농지원부(갑 제9호증)에는 원고가 이사건 농지를 비롯하여 총 6필지의 농지를 소유하면서 그중 5필지의 농지는 "자경"하고, 나머지 1필지(QQ리 22-1)의 농지는 "임대"한 것으로 기재되어 있다.

(Omission of List)

4) On May 2, 2010, the Plaintiff purchased respectively pesticides worth KRW 11,500, KRW 7,000 on July 5, 2010, KRW 23,100 on April 19, 201, KRW 32,00 on April 20, 201, KRW 26,00 on May 7, 201, and KRW 15,00 on June 15, 201.

5) The current status of application for the grant of direct payments for agricultural income preservation, such as rice subsidies, as prescribed by the Act on the Preservation of Agricultural Income with respect to farmland of six parcels, including the farmland in the instant case, is as follows.

(Omission of List)

6) With respect to the cultivation of the farmland in this case, the major contents of the surrounding residents’ statements are as follows.

A) Statement of thisCC

○ Certificates of Facts dated June 19, 2017 (Evidence A No. 13)

- Around 2006, the owner of the farmland in this case was cultivated and managed directly by planting, cultivating, and managing the gathering on the farmland in this case and received KRW 80,00 as its height expenses. Afterwards, the owner of the farmland in this case directly cultivated and managed the gathering from February 2010 to October 2014.

- On November 2014, the farmland in this case filled up soil at a low place with water, and then it was in depth after the owner was changed in 2015.

B) Statement of DoD

○ Certificates of Facts dated May 20, 2017 (Evidence A No. 14)

- From 2006 to 2009, there was a fact that Roteral work was done to gather on the farmland of this case for the purpose of planting it.

(C) the statement of the peripheral EE;

○ Certificates of Facts dated May 26, 2017 (Evidence A No. 15)

- From February 2010, in order to raise approximately 400 flag trees on the farmland of this case, Roter and gakes (e.g., piling up up up soil to raise flags) work, and received 100,000 won as the price therefor.

- The owner of the farmland of this case directly cultivated and managed spawn trees.

○ Witness of the first instance court

- The Plaintiff requested Roter and elaging operations while forming Poter and taging in the farmland of this case, and received KRW 100,000,000 from the Plaintiff.

- It is well known as to who had a rice shed in the farmland in this case from 2006 to 2010, but it was still discussed, and it is obvious that someone is a rice shed.

- 원고는 QQ리 426-2 토지에 농가를 가지고 있는데, 그곳에 이앙기, 분무기, 콤바인, 양수기, 퇴비 등을 보관하고 있다. 원고가 그곳에서 농기계를 가져와 이 사건 농지에서 벼농사를 지은 것이다.

- QQ리 426-2 토지에서 이 사건 농지까지 농기계로 이동하여도 약 30분 정도면 충분하다.

- It is certain that thisCC or KimF did not form a farmer on the farmland in this case. The person who used the farmer in the farmland in this case is only the plaintiff.

- Outers will not directly create a large number of farmland, but request the villagers to grow farming houses on their own land on behalf of the villagers and commission them to do so. They will also entrust farming houses to others.

- The Plaintiff is not a well-known person. For a long time, the Plaintiff is unable to accurately memory whether the Plaintiff works on the farmland of this case. After planting pine trees, the Plaintiff appeared to work directly on the farmland of this case, but it is not well memory before planting pine trees.

- The Plaintiff did not frequently see that it was not frequently in the Easternine. After the planting of pine trees, the Plaintiff did not reach her maturity.

- Before the formation of Mapo-si, the Plaintiff considered the work in the farmland in this case on a one-time basis. The Plaintiff was working to the extent of spreading, managing water, and dusting fertilizers and agricultural chemicals.

- approximately 20 km, 30 km away from the farm will cause a scam.Mthm because there is a 1 ton truck in the farm, it is often divided by transporting agricultural machinery.

D) Statement of ChoG

○ Certificates of Facts dated June 2, 2017 (Evidence A No. 16)

- around February 2010, there was a fact that around 2010, the Plaintiff sold 40-year-old tree (including non-forestation) to the Plaintiff in KRW 12 million.

e)a statement of KimF (CCC’s wife);

○ At the time of the Defendant’s on-site investigation on February 28, 2017 (Evidence No. 4)

- (The farmland of this case) Mountain village was a high-income village, but in fact, it did not frequently work but did not do so, and even if Do has different degrees of Do, it did so only once.

- The spath of spath trees is Park H.

- Before planting pine trees, us (GlaF, LCC) came to hulle rice plants in this context, thereby passing them into the ground (inland). We did not see pine trees in the farmland of this case.

- 이BB이 이 사건 농지를 산 이후에도 우리(김FF, 이CC)가 같이 벼농사를 지었다. 돈은 있어서 땅을 샀는데 농사를 짓지 못하니까, "우리 벼 좀 심어줘. 물 관리도 좀 해주면 품삯은 줄게."라고 하면서 자꾸 온다. 비료나 농약 치고 이럴 때나 소일거리로 한 번씩 온다.

○ Certificate of Facts dated 12, 2017 (Evidence A No. 17)

- ThisCC (Seoul) has partially lent farmland owned by others and has made a farmer.

- The author will be well aware of whose farmland is owned by others, and several peace maps.

- Around February 2017, 2017, the phrase “an employee from a business trip” means that he knows well about the circumstances. In fact, from around 2005 when the owner of the instant farmland was changed, the owner of the instant farmland was not the low-income and her husband, but the owner was directly a rice farmer. Since then around 2010, even though it was not considered in the field where polog trees were planted, polog trees were planted on a certain day, and the owner was directly tending polog trees.

- The owner of the farmland in this case was aware of the extent that the owner of the farmland in this case was stuffed, but he was aware of the fact that the owner was stuffed.

- At the time, the Otax secretary did not know about the correct contents in making a number of questions and answers to wrong.

F) Statement by Justice JJ

○ Statement at the time of the Defendant’s tax investigation on April 19, 2017 (Evidence A No. 4)

- The farmland in this case had been scambling since before thisCC had been a scam, and the scambling of scam trees had been growing since there had been few terminations. After cutting down scam trees, thisCC continued to scam again.

D. Determination

In full view of the following circumstances, it is difficult to recognize that the Plaintiff directly cultivated the farmland of this case for at least eight years between July 28, 2005 and April 3, 2015, the date of acquisition of the farmland of this case, which is the date of acquisition of the farmland of this case, from July 28, 2005 to April 3, 2015, and there is no other evidence to acknowledge it. Therefore, the Plaintiff’s assertion

1) First, we examine the period from January 1, 2014 to April 3, 2015.

Pursuant to Article 66 (14) of the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 26600, Oct. 23, 2015), income accruing from business income under Article 19 (2) of the Income Tax Act (referring to income accruing from agriculture or forestry, income accruing from rental of rights to real estate or real estate, business leasing a factory foundation or mining foundation, business leasing a right to mine, etc.) of the relevant decedent or resident during the cultivation period, and income from side business of a farm household under Article 9 of the Enforcement Decree of the same Act (referring to livestock industry, high public goods manufacturing, private food and drink, special manufacturing, traditional tea manufacturing, fishing, fish, fish, and other similar activities, excluding the total amount of wages received by the decedent by providing labor, remuneration, non-income, bonus or non-taxable income received by a resident, non-taxable income, bonus or other similar expenses, the period belonging to the general meeting of stockholders or members of the relevant university, and the period of bonus or non-taxable income received by the decedent in accordance with a resolution of the general meeting of stockholders.

However, according to the evidence Nos. 3-1 and 2, the Plaintiff’s business income, other than real estate rental business, is KRW 65,941,187, and KRW 52,762,450 in 2014. Therefore, the Plaintiff’s business income, other than real estate rental business, is at least KRW 37 million in 2014 and 2015 (from January 1 to December 31, 2015). Thus, the period from January 1, 2014 to April 3, 2015 to April 3, 2015 is excluded from “the period cultivated by a resident” regardless of whether the Plaintiff directly cultivated the farmland of this case.

2) We examine the periods from July 28, 2005 to February 2009 as follows.

Comprehensively taking account of the following circumstances revealed from the facts acknowledged earlier, it is difficult to view that the Plaintiff directly cultivated the farmland of this case during the period from July 28, 2005 to February 2009.

① As seen earlier, from 2005 to 2009, the Plaintiff obtained business income of KRW 97,538,553 in total while operating a Z Z, “W” shop, “YY” shop, and “VV” restaurant, etc. In addition, considering the characteristics of the singing practice room or main shop, it is difficult to readily accept that the Plaintiff is engaging in the business of running a singing practice room or a main shop on a weekly basis, such as cleaning or preparation of food materials, management of the place of business, etc., in light of the need for a daily work of cleaning or management of food materials, in particular, rice company, and rice company, and in particular, carrying a considerable physical labor force at night. Therefore, it is difficult to readily accept that the Plaintiff is engaging in the business of running a singing practice room or main shop on a weekly basis, or engaging in the business of running a singing practice room or main shop on a weekly basis, taking into account the characteristics of the above business, degree of Plaintiff’s profit, etc.

② On February 28, 2017, at the time of the Defendant’s on-site investigation with respect to the farmland of this case, KimF made a statement to the effect that “ before our (referring to GimF and her husband, her husband, her husband) sweed down rice shed and harvested harvested material from the farmland of this case” was divided into the farmland of this case. The KimF, through a confirmation of facts (Evidence No. 17) dated October 12, 2017, before the Plaintiff acquired the farmland of this case with her husband before acquiring the farmland of this case, the Plaintiff directly died of rice farming in the farmland of this case. After the Plaintiff acquired the farmland of this case, the Defendant’s on-site investigation made the previous statement to the effect that “after the lapse of the time of the Defendant’s on-site investigation without any doubt, she made the statement to the same effect, but this court also reversed the Defendant’s previous statement to the same effect. However, in light of the following: (3) The Defendant’s previous statement to the effect that the Defendant’s testimony was inconsistent with its objective facts.

③ At the time of the Defendant’s on-site investigation, KimF’s statement is a statement from a natural dialogue with a public official in charge of the on-site investigation. According to the overall dialogue, KimF did not specify the exact time, but made a relatively detailed statement about the process of changing the owner of the farmland cultivated and the agricultural crops cultivated in the instant farmland. In particular, KimF, before the Plaintiff’s her and her husband discovered a rice farming house in the instant farmland, and the Plaintiff was aware that the farmland in the instant case was hH., the Plaintiff, the owner of the instant farmland (However, at the time, KimF was aware that hH was the owner of the instant farmland. Park H was the Plaintiff’s hH.) directly cultivated the farmland in the instant case. After the Plaintiff transferred this case’s farmland to Lee, the Plaintiff re-drawed the instant farmland upon entrustment from this B, etc., and made a statement by her husband during a specific period of time based on the specific case of memory, such as the time when the Plaintiff cultivated gal and its owner changed.

④ According to the testimony made by the KimF in this Court, the farmland in this case was the farmland which was the starting life of KimF and the farmland in this case, which was the farmland of KimF, and the farmland in this case was directly adjacent to the farmland in which KimF and LeeCC had left for a long time. The KimF had been cultivated for about five days. As such, in light of the fact that KimF had been cultivated for a long time on the farmland in this case, it cannot be deemed that the statement made by the KimF that he cultivated the farmland in this case by his husband and her husband was a flusent answer or a statement made by mistake under the conditions that the statement made by KimF had not been aware of the correct contents.

⑤ At the time of the Defendant’s investigation, the KJ made a statement to the effect that “CC had become a farmer in the farmland of this case since before the date of the instant investigation.” The land owner tried to have spawn spawn for a few years since spawned spawn, and then this CC re-spawned. This is consistent with the details stated at the time of the Defendant’

(6) The Plaintiff submitted a confirmation document prepared by thisCC, DoD, YE, YG, and KimF as evidence that directly cultivated rice in the instant farmland from the time of acquiring the instant farmland to February 2, 2009, and the testimony made by the EE in the first instance court also conforms to the Plaintiff’s assertion. As seen earlier, it is difficult to believe that the confirmation document prepared by KimF is difficult, and the remainder of the evidence is difficult to believe, or it is insufficient to acknowledge the facts alleged by the Plaintiff for the following reasons.

7. The fact-finding confirmation (Evidence A) written by thisCC is inconsistent with the Defendant’s tax investigation, and it is difficult to believe it as it is, in light of the fact that it is a document that was made late after the Defendant’s tax investigation and that it is also inconsistent with the above testimony of the Defendant KimF.

8) The content of a confirmation of the fact (Evidence 14) prepared by D, is merely that D has received 80,000 won from the Plaintiff to 2009 from 206 to 2009 to her mother in the farmland of this case, and thus, the Plaintiff does not actively support the fact that the Plaintiff directly cultivated her rice shed in the farmland of this case at that time.

9) The content of the confirmation of the fact (Evidence A 15) written by the Red EE is that the Plaintiff cultivated and directly cultivated spores in the farmland of this case on or around February 2010. Thus, the Plaintiff does not support the fact that the Plaintiff directly cultivated spores in the farmland of this case from the time of acquiring the farmland of this case to February 2, 2009. In addition, the overall purport of the testimony made by the Red EE in the court of first instance is that “the Plaintiff cultivated spores before planting spores in the farmland of this case, but who is the cultivator.” As such, the part corresponding to the Plaintiff’s assertion among the testimony by the Red EE is not sufficient to recognize the fact that the Plaintiff directly cultivated spores in the farmland of this case from the time of acquiring the farmland of this case to February 2009.

(10) The content of the fact-finding certificate (Evidence No. 16 of the A), prepared by Cho GG, is that the Plaintiff sold 400 spora trees to the Plaintiff on or around February 2, 2010. Therefore, the Plaintiff does not support the fact that the Plaintiff directly cultivated rice farmers in the instant farmland from 2005 to February 2010.

3) Lastly, based on the above circumstances, we examine whether the requirements for reduction or exemption of the transfer income tax of this case are satisfied.

The Plaintiff purchased the instant farmland on July 28, 2005, sold it on April 3, 2015, and owned the instant farmland for nine years and eight months in total. However, as seen above, in 2014 and 2015, the Plaintiff’s annual business income, other than the real estate rental business, should be excluded from “period cultivated by a resident” in excess of KRW 37 million, and it cannot be deemed that the Plaintiff directly cultivated the instant farmland from February 2009 to February 2009, regardless of whether the Plaintiff directly cultivated the instant farmland for at least eight years from December 31, 2013.

3. Conclusion

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