Since farmland used as a site for a regional festival has lost its form as a thesis, it shall not be deemed farmland subject to self-recoveration or reduction.

Land which has ceased to be a form of discussion, such as the installation of mags and sculptures, so that tourists may freely enter into the regional festival promotion committee, shall not be deemed farmland in a state of temporary closure.

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

2014Guhap2335 Assignment Detailed and Revocation of Disposition

지지지지

○○ Head of tax office

July 2, 2015

September 10, 2015

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 imposing capital gains tax on the Plaintiff on July 7, 2014 is revoked.

1. Details of the disposition;

A. On June 19, 2013, the Plaintiff, to BB, and three others, is deemed BB and B, and B B B, which he/she had owned, is deemed to be BB B.

Before concluding a contract to sell KRW 780,00,00 of the amount of 1,847 square meters in Blueeri- Blueririri- Blueriri- Blueriri- Blueri- Blueri, and each of the instant lands was completed on August 12, 2013, and each of the instant lands constitutes “self-sufficient farmland for at least eight years” as prescribed by Article 69(1) of the Restriction of Special Taxation Act, and thus applying the said provision to the Defendant on October 28, 2013, a preliminary return on capital gains tax was made on October 28, 2013.

B. The defendant does not consider that each of the lands of this case does not constitute one with self-major farmland for not less than eight years.

On July 7, 2014, the Plaintiff denied the application for reduction of or exemption from the Do income tax and imposed capital gains tax of KRW 186,340,734 on the Plaintiff in 2013 (hereinafter referred to as the “instant disposition”).

C. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on August 1, 2014, but the Tax Tribunal dismissed the appeal on October 6, 2014.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, 3, 4, Eul evidence Nos. 1 and 2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

From March 6, 1997, the Plaintiff acquired each of the instant land from March 6, 1997 to Blue House of Blue City, Blue House of Blue City, Blue House of Blue House (hereinafter referred to as the “instant promotion committee”) and had a rice farmer for about 13 years from January 1, 201 leased each of the instant land to the Promotion Committee of Blue House of Blue House of Blue City (hereinafter referred to as the “Promotion Committee”), and the instant promotion committee has cultivated sulbry, means, suls, and sullass, etc. to create a landscape complex from each of the instant land until June 19, 2013, and thus, it constitutes farmland as of August 12, 2013, which is the transfer date, and accordingly, the instant disposition should be revoked by unlawful means.

B. Facts of recognition

1) At the time of March 6, 1997, the Plaintiff received each of the instant land at KRW 27,173,99,00 from CC, its father, and transferred it to 780,000,000,000 on August 12, 2013, respectively.

2) From March 6, 1997 to 2010, the Plaintiff directly operated iron bars in each of the instant lands for about 13 years from around 1997, and operated iron bars in the vicinity of each of the instant land. Since 2011, the Plaintiff was working for “△△△△△△” in 2011, while working for “△△△△” in 201, 9,600,000, and earned earned income of KRW 8,000,000 in 20. Since 2012, the Plaintiff operated personal business in △△ City. Since 2013, the total amount of income in 2013 was KRW 1,175,930,644, and the amount of income was KRW 66,319,625.

3) The instant promotion committee concluded a contract with the Plaintiff to lease KRW 3,275,30 each year for the development project of the Do senior landscape complex, including the construction of grassland and ancillary facilities from January 1, 201 to December 31, 2011, with each of the instant land and the instant land and the instant land of the same Ri Dou-Sebban 1,636 square meters from January 1, 201 to December 31, 201, and from January 1, 2012 to December 31, 2012. According to the above contract, the Plaintiff is to manage the farming of each of the instant land, and the said rent includes the amount in the name of compensating the Plaintiff’s income loss.

4) After renting each of the instant lands, the instant promotion committee set up various sculptures, such as a sprinkbling tunnel and fireworks, on each of the instant lands, and used them as an event site and a sales place for a sprinking and a sprinking seasoning. The same applies to October 2013, which was subsequent to the transfer of each of the instant lands. The costs, such as the cost of installation necessary for the instant work, were borne by the instant promotion committee.

5) At the time of the Plaintiff’s transfer of each of the instant lands, each of the instant lands was not in the form of discussions with soil covering so that people can freely access to each of the instant lands, and part of the land was in the state in which a tide-buling tunnel was installed.

[Ground of recognition] A without dispute, Gap evidence Nos. 1 through 10, 17, 21, Eul evidence Nos. 1 through 7, the fact-finding conducted by this court on Bright Metropolitan City, the result of the on-site verification conducted by this court, the witness EE testimony, and the purport of the whole pleadings

C. Determination

1) Relevant regulations and legal principles

A) Article 69(1) of the Restriction of Special Taxation Act provides, “The tax amount equivalent to 100/100 of capital gains tax shall be reduced or exempted on the income accruing from the transfer of land prescribed by Presidential Decree, among land cultivated directly by a resident prescribed by Presidential Decree who resides in the seat of farmland for at least eight years, and Article 66(4) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 25590, Sep. 11, 2014; hereinafter “former Enforcement Decree of the Restriction of Special Taxation Act”) provides, “the land prescribed by Presidential Decree” in the main sentence of Article 69(1) of the former Enforcement Decree of the Restriction of Special Taxation Act means “the farmland subject to the provisions of paragraph (4) shall be as of the date of transfer under Article 162 of the Enforcement Decree of the Income Tax Act, which has been cultivated for at least eight years from the time of its acquisition until the time of transfer.”

B) Under the principle of no taxation without law, the interpretation of a tax law is to be interpreted in accordance with the text of the law, barring special circumstances, by denying the requirements for taxation or non-taxation or tax exemption, and it is not permissible to expand or analogically interpret without reasonable grounds. In particular, it accords with the principle of fair taxation to strictly interpret the provision that is clearly considered as a preferential provision among the requirements for reduction or exemption accords with the principle of fair taxation (Supreme Court Decision 2011Du20116 Decided December 13, 201).

In order for the Plaintiff to have the capital gains tax reduced or exempted pursuant to relevant Acts and subordinate statutes, such as Article 69(1) of the Restriction of Special Taxation Act and Article 66(1) and (2) of the Enforcement Decree of the Restriction of Special Taxation Act, the relevant land shall be cultivated directly at the location of farmland for not less than eight years, and the relevant land shall be farmland as of the date of transfer; and land not actually cultivated as of the date of transfer shall not be deemed farmland as of the date of transfer, unless it is used as farmland by the landowner or by another person, or is in a temporary state of absence (see, e.g., Supreme Court Decision 2004Du5003, Jun. 23, 2005). Such reduced or exempted farmland shall not be deemed as including land in which the shape of the land can be used for cultivation even if it is not actually cultivated (see, e.g., Supreme Court Decision 88Nu6252, Feb. 14, 198).

2) Determination

Inasmuch as there is no dispute between the parties that the Plaintiff resided in each area of the instant land for at least eight years, and the fact that the Plaintiff was self-satisfying, it is difficult to recognize that the evidence alone submitted by the Plaintiff was being used as farmland or that each of the instant land was temporarily in a state of temporary closure, in light of the following circumstances, as to whether the Plaintiff was using each of the instant land as farmland around August 12, 2013 by transferring each of the instant land to BB and three others.

① Each of the instant lands has been used as a debate until 2010. Even based on the Plaintiff’s assertion, the Plaintiff did not set a rice shed as past since January 1, 201, which was leased each of the instant lands to the Promotion Committee for the creation of a landscape complex, and each of the instant lands lost its form as a debate while managing the instant land by inserting expenses to the Promotion Committee and installing a marina sand.

② Meanwhile, in light of the following: (a) the Plaintiff worked in the company located in △△ City since 2011 and operated a business directly with wage and salary income; (b) the point of time after the lease of each of the instant land to create a landscape complex; (c) the Plaintiff’s business sales size was significant; and (d) the Plaintiff’s workplace or place of business continued to be in △△△ after 201, it appears that the Plaintiff was difficult for the Plaintiff to autonomously set up or manage the farmer’s house in each of the instant land; and (c) the Plaintiff did not seem to have temporarily suspended the farmer’s house in consideration of the circumstances in which the Plaintiff sold each of the instant land to BB, etc

③ Considering the fact that farmland is the foundation necessary for supplying food to the people and preserving the national environment, and is a limited valuable resource that affects the harmonious development of agriculture and the national economy (see Article 3(1) of the Farmland Act), even though the landscape complex was installed, and even if the landscape park was established, it cannot be immediately deemed that each of the instant land constitutes farmland.

④ In addition to the festival period, the Plaintiff was engaged in planting and managing crops, such as means, gras, and Cheonguri, on each land of this case. However, the evidence submitted by the Plaintiff alone is insufficient to acknowledge such fact, and there is no other evidence to acknowledge it. Even if the Plaintiff’s airline team submitted, it is difficult to confirm whether the present situation at the time of the transfer of each land of this case

Therefore, the defendant's disposition of this case that each of the lands of this case does not constitute one of own farmland for not less than eight years is legitimate.

3. Conclusion

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