Whether the farmland falls under one's own farmland for at least eight years;

Since the land of this case is used as a factory site at the time of transfer, it does not constitute self-arable farmland.

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

1. All of the plaintiffs' claims are dismissed.

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

Purport of Claim

The Defendant’s disposition of imposition of KRW 38,211,520 on July 21, 2005 against the Plaintiffs is revoked.

1. Details of the disposition;

A. On April 27, 1989, ○○○○○○○○○○○○○○○○○○○○○○○○, and transferred the instant land to Kim○○○ on October 26, 2004. Meanwhile, the instant land was originally classified as the instant land, but was changed to the land for factory on September 9, 2003.

B. When filing a preliminary return on the transfer income tax following the transfer of the land of this case with the Defendant, the State-○ filed an application for reduction of or exemption from the transfer income tax on the ground that the land of this case constitutes “self-employed farmland for at least eight years” under Article 69(1) of the former Restriction of Special Taxation Act (wholly amended by Act No. 7322, Dec. 31, 2004; hereinafter “former Restriction of Special Taxation Act”).

C. However, on July 21, 2005, the Defendant excluded the application for reduction or exemption on the ground that the instant land was not farmland at the time of transfer, and subsequently rendered the instant disposition imposing KRW 38,211,520 on the Jeju ○○ in 2004.

D. As the Jeju ○○ died on June 26, 2006, the Plaintiffs, who were his wife, and the rest of the Plaintiffs, who were his wife, succeeded to the said capital gains tax liability by becoming co-inheritors of the Jeju ○○○○○○ and their children.

[Reasons for Recognition] The entry of Gap evidence 1, Eul evidence 1 to 5 (including additional number), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

(1) The Defendant violated Article 81-5(1) of the former Framework Act on National Taxes (amended by Act No. 8139 of Dec. 30, 2006; hereinafter “former Framework Act on National Taxes”) that the Defendant did not conduct a field investigation in order to exclude the application for reduction and exemption of the network Jeju ○○○ from the scope of application for reduction and exemption, thereby presumed that the taxpayer’s report, etc. submitted by him is true.

(2) The transfer income tax should be exempted pursuant to Article 69 of the former Restriction of Special Taxation Act, since the ○○○○ acquired the instant land and thereafter 15 years or more from the time of transfer.

(b) Related statutes;

Attached Form is as shown in the attached Form.

C. Determination

(1) Determination on the first argument

According to the above evidence and evidence evidence Nos. 2 and 3, the defendant can confirm that the land in this case is not farmland at the time of transfer as a result of inquiring about the integrated national tax system and the spring market based on the land category at the time of the transfer of land in this case on the real estate sales contract and land cadastre submitted by the ○○○○ at the time of the above application for reduction and exemption. Meanwhile, under Article 81-5 (1) and (2) of the former Framework Act on National Taxes, "where there is clear evidence to acknowledge the consultation on omissions or errors in the reported contents", the taxpayer may exclude the presumption of the truth of the report, etc. submitted by him, and conduct a tax investigation as to the contents thereof, and it does not necessarily undergo a on-site investigation at the time of tax investigation. Thus, it cannot be said that there is any error in the law by failing to conduct a on-site investigation on the application for reduction

(2) Judgment on the second argument

The term "self-arable farmland for at least eight years for which the transfer income tax under the former Restriction of Special Taxation Act and its Enforcement Decree is reduced or exempted" means the land which has been cultivated by the resident for at least eight years between the time of acquisition and the time of acquisition while residing in the area of Si/Gun/Gu where the farmland is located or adjacent to the Si/Gun/Gu, and which is confirmed as farmland as of the date of transfer. Thus, it is difficult to believe that each statement of evidence No. 17 through No. 12 as to whether the land in this case was farmland at the time of transfer of the land in this case is farmland in light of the following circumstances, and there is no evidence to acknowledge it otherwise.

Rather, the land category of this case was changed to the land for a factory on September 9, 2003. In full view of the purport of the entire pleadings in each entry in the evidence Nos. 6 through 10 as seen earlier, ① ○○ applied for a construction permit to construct a factory on or around March 2003, and obtained a construction permit on April 23, 2003, and thereafter paid the farmland creation cost on April 28, 2003, ② the Plaintiffs did not assert or prove the form or method of cultivation of the land of this case; ③ the land of this case was changed to the factory site before the transfer of the land of this case; ④ the officially assessed land price of this case in 2004 was higher than the publicly assessed land price of neighboring land and the land price of neighboring land was similar to the publicly assessed land price of neighboring land.

Therefore, the plaintiffs' assertion on the premise that the land of this case was farmland at the time of its transfer is not reasonable.

3. Conclusion

Therefore, the plaintiffs' claims of this case are dismissed in entirety as it is without merit. It is so decided as per Disposition.

Relevant statutes

director of the former Framework Act on National Taxes (amended by Act No. 8139 of Dec. 30, 2006)

Article 81-5 (Presumption of Taxpayer's Sincerity and Tax Investigation)

(1) A tax official shall presume that a taxpayer is sincere and the return, etc. submitted by him is true, unless he falls under any subparagraph of paragraph (2).

(2) In cases falling under any one of the following subparagraphs, a tax official may preferentially select taxpayers subject to tax investigation and conduct a tax investigation on the details of returns, etc. submitted by them:

4. Where there is an evident material corroborating a suspicion of the omissions or errors in the contents of a return filed by a taxpayer.

director of the former Restriction of Special Taxation Act (amended by Act No. 7322 of Dec. 31, 2004)

Article 69 (Abatement or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

(1) With respect to the income accruing from the transfer of land prescribed by Presidential Decree among the land which is subject to taxation of agricultural income tax (including those subject to non-taxation, reduction and exemption, and small collection), which is continuously cultivated by the resident prescribed by Presidential Decree residing in the location of such land for not less than eight years (general omitted), the tax amount equivalent to 100/100 of the transfer income tax shall be reduced or exempted.

(1) The former Restriction of Special Taxation Act (amended by Presidential Decree No. 18704 of Feb. 19, 2005)

Article 66 (Abatement or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

(1) The term “resident prescribed by the Presidential Decree residing in the seat of any farmland” in the main sentence of Article 69 (1) of the Act means a person who has cultivated while residing in the area falling under any of the following subparagraphs (including the area corresponding to the relevant area at the time of commencing a cultivation, but not corresponding thereto due to a reorganization of administrative districts) for at least eight years:

1. An area in a Si/Gun/Gu (referring to an autonomous Gu; hereafter the same shall apply in this paragraph) where farmland is located;

2. An area within a Si/Gun/Gu adjacent to an area referred to in subparagraph 1.

(4) The term “land prescribed by the Presidential Decree” in the main sentence of Article 69 (1) of the Act means the farmland that has been cultivated by himself for not less than eight years from the time of acquisition to the time of transfer, excluding that falling under any of the following subparagraphs. In this case, in calculating the period of farmland cultivated in inherited, the period acquired and cultivated by his predecessor shall be deemed the period of cultivation by his heir:

(5) The farmland subject to paragraph (4) shall be based on the farmland as of the date of transfer under Article 162 of the Enforcement Decree of the Income Tax Act: Provided, That where a purchaser has altered the form and quality of farmland and started construction in accordance with the terms and conditions of a sales contract before the transfer date, it shall be based on farmland as of the date of a sales contract where construction has been commenced, etc., and where the relevant farmland has not been cultivated by the implementation of construction works for creating the land after the designation of the land scheduled

(1) Enforcement Rule of the Restriction of Special Taxation Act (amended by Ordinance of the Ministry of Government Administration and Home Affairs No. 421 of March 11, 2005)

Article 27 (Scope, etc. of Farmland)

(1) Farmland under the provisions of Article 66 (3) of the Decree shall be the land actually used for cultivation regardless of the land category on the public cadastral book as the whole and the answer, and it shall include the farmer's room, compost shed, pumping station, pumping station, branch office, concentration, waterway, etc. directly necessary for farmland management.

(2) The confirmation of whether land falls under Article 66 (3) of the Decree shall be made in accordance with the following standards:

1. It shall be the land, the transferor of which has been confirmed by a certified copy of the register or a certified copy of land cadastre or other evidence for at least eight years;

2. That the transferor has resided in a location of farmland for eight years or more by means of a certified copy of the resident registration, or a certified copy of the farmland ledger issued or issued by the head of Si/Gu/Eup/Myeon, and a self-certification, and that it has cultivated himself/herself, and it is confirmed that it is farmland as of the date of transfer.