Review Transfer 2019-0234 (Law No. 9.18, 2009)

No person shall be deemed to have cultivated at least 1/2 of farming works with his/her own labor;

The cultivation of land by a relative or another person shall not be deemed to have cultivated or cultivated with his own labor, and only the cultivation of land on weekends or holidays shall not be deemed to have cultivated more than 1/2 of the farming work, and it shall not apply to the case of expropriation under the former Urban Development Act. Therefore, the land for non-business use constitutes land.

2011Guhap970 Revocation of Disposition of Imposing capital gains tax

XX

The director of the Southern Incheon District Office

April 14, 2011

May 12, 2011

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s disposition of imposing KRW 282,674,90 on the Plaintiff on July 1, 2009 is revoked.

1. Details of the disposition;

A. On August 23, 2002, the Plaintiff acquired 000-0 m2 (hereinafter referred to as “instant land”) from the Incheon OO-gu, Incheon OO-dong 000-0 m2 (hereinafter referred to as “the instant land”) and transferred it to the XX m378 m2 on December 12, 2006.

B. On December 19, 2006, the Plaintiff calculated the acquisition value and transfer value of the instant land as the standard market price and paid KRW 136,045,310 of the transfer income tax reverted to the year 2006 as the preliminary return and payment.

C. On July 1, 2009, the Defendant deemed the instant land as the land for non-business use and calculated the acquisition value and transfer value as the actual transaction value, and additionally imposed an additional tax of KRW 282,674,90 (including the additional tax for unfaithful return and the additional tax for unfaithful return totaling KRW 69,376,943) for the year 2006 on the Plaintiff.

D. The Plaintiff appealed and filed a request for examination with the Commissioner of the National Tax Service on September 18, 2009, but the Commissioner of the National Tax Service dismissed the request on December 7, 2009.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 and 2 (including branch numbers, if any; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

① The term “self-sufficiency” under the former Income Tax Act and the former Enforcement Decree of the Income Tax Act refer to the formation of a farmer’s house under his own account and responsibility, and does not require more than 1/2 of his own labor. Article 168-8(2) of the former Enforcement Decree of the Income Tax Act provides for the scope of delegation under Article 104-3(1)1(a) of the former Income Tax Act, which is null and void. The Plaintiff cultivated the instant land by using a relative or other person’s labor force while residing in the vicinity of the instant land. Therefore, the instant land does not constitute a non-business land under Article 104-3(1)1(a) of the former Income Tax Act, but it is unlawful to deem otherwise.

② On November 6, 2006, the instant land was designated as an urban development zone, and the Plaintiff transferred the instant land to the XX subordinate Party, which was practically performing the project implementer, for public services. Therefore, the instant land is not the non-business land pursuant to Article 104-3(2) of the former Income Tax Act and Article 168-14(3)3 of the Enforcement Decree of the same Act, but the instant land was not the non-business land, but otherwise deemed unlawful.

③ Even if the instant land falls under non-business land, it constitutes a case where there is disagreement in view of the interpretation of the tax law on ‘self-reliance' and there is a justifiable ground for not being able to mislead the taxpayer into neglecting his/her duty. As such, the part of the disposition of this case imposing penalty on the Plaintiff is unreasonable.

B. Relevant statutes

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

C. Determination

1) Determination as to the assertion 1

A) Article 96 (2) of the former Income Tax Act (amended by Act No. 8144 of Dec. 30, 2006; hereinafter the same shall apply) provides that the transfer value of the land shall be based on the market price as at the time of transfer of the relevant assets except in cases falling under any of the following subparagraphs, and Article 104-3 (1) 8 of the same Act provides that "the land for non-business use under Article 104-3" is one of the land for non-business use under Article 104-3 (1) 1 (a) of the same Act, and Article 96 (2) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 8144 of Dec. 30, 2006; hereinafter the same shall apply) and Article 16-8 (2) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 20618 of Feb. 22, 2008; hereinafter the same shall apply).

B) The plaintiff argues that the provision of Article 168-8 (2) of the former Enforcement Decree of the Income Tax Act is invalid beyond the delegation scope of Article 104-3 (1) 1 (a) of the former Enforcement Decree of the Income Tax Act, and that the "self-cultivation of farmland" merely means the formation of a farmer under his/her own account and responsibility, and it does not require the cultivation of more than half of his/her own labor force. As seen earlier, Article 104-3 (1) 1 (a) of the former Income Tax Act provides that "the owner of farmland does not reside in the location of farmland or does not own farmland for non-business purpose" and delegates the detailed scope to the Presidential Decree, and Article 168-8 (2) of the former Enforcement Decree of the Income Tax Act provides that "the owner of the farmland does not reside in the location of the farmland or that the owner of the farmland does not own the farmland for non-business purpose," and in particular, Article 28-2 (2) of the former Enforcement Decree of the Income Tax Act provides that the plaintiff's own or the farmland for non-owned.

C) As to whether the instant land was “land not cultivated by the owner” as prescribed in Article 104-3(1)1(a) of the former Income Tax Act, the Plaintiff purchased 20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m200 m20 m200 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m20 m30 m20 m30 m20 m20 m20 m30 m20 m20 m20 m3.

Comprehensively taking account of the following circumstances acknowledged based on the aforementioned facts and the purport of the entire pleadings, the Plaintiff may recognize the fact that the Plaintiff is constantly engaged in the cultivation of the instant land or did not have 1/2 or more of the farming work with its own labor. Each of the statements in Gap evidence Nos. 6 through 12, 15, and 16 does not interfere with the above recognition. Therefore, it is reasonable to view that the instant land constitutes land for non-business as "land not cultivated by the owner" under Article 104-3 (1) 1 (a) of the former Income Tax Act.

① In light of the fact that the Plaintiff had worked regularly in the U.O.C. and owned farmland, site, commercial building, etc. in many places other than the instant land, it seems not easy for the Plaintiff to directly cultivate the instant land. ② The Plaintiff’s assertion that the Plaintiff cultivated the instant land to his relative or others, and on weekend or holidays, he directly cultivated or cultivated the instant land with his own labor, and it is difficult to deem that the Plaintiff had carried out not less than a half of the farming work only on weekend or holidays. ③ According to the evidence No. 6, the Plaintiff was recognized to have been registered as a person eligible for direct payments, etc. for the instant land from 2004 to 2006, but the Act on the Preservation of Rice Income, etc. does not meet the requirements for direct payments, such as rice income, etc. for the purpose of stabilizing the income of farmers, etc. as its principal legislative purpose. ④ According to the evidence No. 7O, the Plaintiff was recognized as a member of the Agricultural Cooperatives, but does not meet the requirements for preserving direct payments, etc.

At the time of accession on November 25, 200, the Plaintiff did not form a farmer and joined the Plaintiff’s family members on the ground that there was a farmer. (5) According to the evidence No. 10, sales from March 19, 2003 to October 18, 2006, OF made the Plaintiff a customer, but includes a large number of items used for dry field farming unrelated to the instant land, such as studs, ancient carbons, and liquidation aggregate, although it is recognized that sales from OF had occurred from March 19, 2003 to October 18, 2006. (6) The Plaintiff did not submit data on sales of rice produced from 2008, which was after the transfer of the instant land, to OFF, for the period of sale of rice produced from 2002 to 2006.

2) Judgment on the assertion ②

A) Article 104-3 (2) of the former Income Tax Act provides that the land for non-business use may not be deemed the land for non-business use due to other inevitable reasons as prescribed by the Presidential Decree, and Article 168-14 (3) 3 of the former Enforcement Decree of Income Tax Act provides that the land which is purchased by consultation or expropriated pursuant to the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects and other Acts shall be the land which is purchased by consultation or expropriated pursuant to the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects and other Acts.

B) According to the evidence Nos. 3, 4, and 2.7 in this case, according to the fact that the land of this case was designated as an urban development zone under the Urban Development Act on Nov. 6, 2006, the Plaintiff sold the land of this case to the xur Government Co., Ltd. on Nov. 28, 2006, and completed the registration of ownership transfer on Dec. 12 of the same year with the above sale as the ground for registration, and the xure Co., Ltd. was designated as the implementer of the above urban development project on Jan. 25, 2007.

However, Article 11 (1) 4 of the former Urban Development Act (amended by Act No. 8376 of Apr. 11, 2007; hereinafter the same) provides that "the implementer of an urban development project" means a person who owns not less than 2/3 of the area of land (in the case of expropriation or use under Article 20, it refers to a person who owns not less than 2/3 of the area excluding the State and public land in the urban development zone, and a person who has obtained a license under Article 9 of the Public Waters Reclamation Act shall be deemed an owner of the relevant public waters and such public waters shall be deemed land)" and Article 20 (1) provides that "the urban development project may be implemented by the method of expropriation or use of land in the urban development zone or by the method of replotting or the method of mixed use thereof," and Article 21 (1) provides that "the implementer may expropriate or use the land, etc. necessary for the urban development project."

According to the above provisions, the method of implementation of an urban development project under the former Urban Development Act is limited to expropriation, use, replotting and the combined method thereof, and it does not include purchase. Therefore, the Plaintiff’s selling of the instant land to XX Hawn Co., Ltd. cannot be deemed to have been expropriated pursuant to the former Urban Development Act. Therefore, the instant land does not constitute a case where it does not constitute a non-business land under Article 104-3(2) of the Income Tax Act and Article 168-14(3)3 of the former Enforcement Decree

3) Judgment on the assertion No. 3

A) Under the tax law, in order to facilitate the exercise of the right to impose taxes and the realization of tax claims, the taxpayer’s intentional and negligent acts are not considered as administrative sanctions imposed in accordance with the law in cases where the taxpayer violates the declaration and tax liability, etc. under the law without justifiable grounds, and the taxpayer’s intentional and negligent acts do not constitute justifiable grounds. However, in cases where it is unreasonable for the taxpayer to be aware of his/her duty, to deem that it is unreasonable for him/her to have not known of his/her duty, or where it is unreasonable for him/her to expect the fulfillment of his/her duty, it shall be deemed that there is a justifiable reason not to be attributable to his/her duty (see, e.g., Supreme Court Decisions 95Nu3596, Feb. 9, 1996; 200Du5944, Apr. 12, 2002).

B) In the case of this case, the decision that the Plaintiff did not fall under the land for non-business under Article 104-3 (1) 1 (a) of the former Income Tax Act and does not fall under the land for non-business under Article 104-3 (2) of the same Act and Article 168-14 (3) 3 of the former Enforcement Decree of the Income Tax Act is merely erroneous in the law, and it is difficult to view that there is any justifiable reason that it is not attributable to the Plaintiff’s failure to perform his duties

3. Conclusion

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