It is difficult to see that a police officer directly cultivated crops while performing his duties, and the taxable period in which the total amount of salaries is at least 37 million won is excluded from the cultivation period.

Article 66 (14) of the Enforcement Decree of the Restriction of Special Taxation Act which provides that the taxable period in which the total amount of salaries is not less than 37 million won shall be excluded from the cultivation period is legally stipulated within the delegation scope under Article 69 of the Restriction of Special Taxation Act of the mother corporation.

Article 66 of the Enforcement Decree of the Restriction of Special Taxation Act: Reduction or exemption of transfer income tax for self-Cultivating farmland

Suwon District Court 2016Gudan9040 Revocation of Disposition of Imposing Capital Gains Tax

AA

00. Head of tax office

on 017 October 06, 201

on October 16, 2017

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 of imposition of capital gains tax of KRW 123,575,810 (including additional tax) for the Plaintiff on July 1, 2016 shall be revoked.

1. Details of the disposition;

(1) On May 14, 1999, the registration of ownership transfer (the purchase on May 13, 1999) in the name of LLL (the birth on January 15, 1928, the Plaintiff’s attachment) was completed on May 22, 2006 by the above registry office as the receipt No. 4812 on May 22, 2006, the registration of ownership transfer (the testamentary gift on March 29, 2006) in the Plaintiff’s name was completed on July 8, 2015 by the above registry office No. 0000 on July 8, 2015.

The Plaintiff appears from 00 on July 16, 2015 to have obtained the farmland of this case through consultation.

After receiving KRW 658,920,000 for prize money, the applicant filed an application for reduction or exemption for self-Cultivating farmland under Article 69 of the Restriction of Special Taxation Act while reporting the transfer income tax accordingly.

Article 66(14) of the Enforcement Decree of the Restriction of Special Taxation Act (Presidential Decree No. 25211, Feb. 21, 2014) provides that the Plaintiff shall be exempted from capital gains tax reduction or exemption pursuant to Article 66(14) of the Enforcement Decree of the Restriction of Special Taxation Act (Presidential Decree No. 25211, Feb. 21, 2014) during the period of the Plaintiff’s possession of the instant farmland: (i) KRW 123,575,810 (i) calculated tax amount of KRW 129,148,555 (i.e., calculated tax amount of KRW 129,148,64,692 + Additional tax of KRW 24,64,692 + Additional tax of KRW 10,450,386 + Additional tax of KRW 8,621,568).

x) The plaintiff appealed and filed an appeal with the Tax Tribunal on August 16, 2016, but the Tax Tribunal dismissed the appeal on October 19, 2016.

Facts that there is no dispute over the basis of recognition, Gap evidence 1, 2, Eul evidence 1, 3, Eul evidence 4-1, 2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

(1) According to Article 66(11) and (12) of the Enforcement Decree of the Restriction of Special Taxation Act, in determining whether the inherited farmland constitutes farmland for a period of eight years or more, the cultivation period of the decedent shall be deemed as the cultivation period of the heir in case the heir continues to cultivate the inherited farmland for one year or more, and (2) the heir is unable to cultivate the inherited farmland for a period of three years or more from the date of succession, or is transferred by consultation or expropriated under the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects, or other Acts and subordinate statutes, and if the heir is designated as a certain area (referring to a housing site development zone designated under Article 3 of the Housing Site Development Promotion Act, an industrial complex designated under Article 6, 7, 7-2 or 8 of the Industrial Sites and Development Act, and any other area determined by Ordinance of the Ministry of Strategy and Finance as such), the cultivation period of the decedent shall be deemed as the cultivation period of the heir. According to this, unless there is any special circumstance, if the heir transfers the inherited farmland after three years or more.

On the other hand, with respect to the calculation of the cultivation period mentioned in the above Enforcement Decree of the Restriction of Special Taxation Act (Presidential Decree No. 25211, Feb. 21, 2014), Article 66(14) of the Enforcement Decree of the Restriction of Special Taxation Act provides that "where the sum of the total salary under Article 19(2) of the Income Tax Act of the relevant decedent (including his/her spouse; hereinafter the same shall apply) or of the resident is at least 37 million won (excluding the income accruing from agriculture or forestry, the income accruing from the real estate rental business under Article 45(2) of the Income Tax Act, and the income from the side business of the farm household under Article 9 of the Enforcement Decree of the Income Tax Act) and the total salary under Article 20(2) of the same Act, such period shall be excluded from the cultivation period cultivated by the decedent or resident on or after July 1, 2014 (the proviso to Article 1(1) and Article 2(2) of the Enforcement Decree

D. The Plaintiff transferred the farmland of this case after the lapse of three years from the date of testamentary gift. As such, the Plaintiff may be granted reduction or exemption of capital gains tax only if he/she had cultivated the farmland of this case in this case for at least eight years by himself/herself, which met the requirements for self-owned farmland for at least eight years, or has continuously cultivated the farmland of this case for at least one year as his/her heir, thereby satisfying the requirements for farmland for at least eight years. Thus, if the Plaintiff has not cultivated the farmland of this case

먼저 원고가 이 사건 이 사건 농지를 1년 이상 직접 경작하였는지 여부에 관하여 보건대, ① 원고는 그 주장사실에 부합하는 증거로서, 갑 제4호증(2002. 2. 28. 작성된 LLL의 농지원부), 갑 제5호증(2014. 7. 14. 작성된 원고의 농지원부), 갑 제6호증의1 내지 8(1998.부터 2015.까지 사이에 촬영된 항공사진), 갑 제9호증의 1(원고가 2015. 9.경 작성한 의견서), 갑 제9호증의 2(원고가 2016. 3. 3.경 작성한 의견서), 갑 제17호증의 1, 2(LLL이 2002. 12.경 한국전력공사에 농업용 전기공급을 신청한 서류 및 전기요금납부서), 갑 제17호증의 3(한00 작성의 인우보증서), 갑 제17호증의 4 내지 15(농작물 사진), 갑 제18호증의 1(원고의 처 오00가 2008. 11.경 '00농원'이라는 상호의 낸 화훼도소매업 사업자등록증), 갑 제18호증의 2(위 '00농원' 간판이 보이는 네이버 지도의 사진), 갑 제19호증(오00가 운영하는 '00농원'의 2008.부터 2016.까지의 연간수입금액이 적게는 10만 원에서 많게는 2,050만원에 이른다는 내용의 수입금액증명원), 갑 제20호증(신용카드사용내역서), 갑 제21호증의 1, 2, 3(예초기 배송사진), 갑 제22호증의 1, 2, 3(체인톱 배송사진), 갑 제23호증의 1(선풍기 사진), 갑 제23호증의 2, 3(이동용 수레 사진), 갑 제23호증의 4, 5(갈퀴 등 사진), 갑 제25호증(원고가 2017. 3. 28. 작성한 의견서), 갑 제27호증(이 사건 농지에서 2000. 12. 이후 현재까지 LLL 명의로 전기를 신청하여 사용하고 있다는 내용의 한국전력공사 서초지사장 작성의 2017. 5. 29.자 확인서), 갑 제28호증의 1, 2, 3(농작물 사진)을 각 제출하고 있으나, ② 위와 같은 각종 증거자료에도 불구하고, 을 제2호증(근로소득내역조회), 을 제3호증(00공사 00지역본부장 작성의 2015. 7. 16.자 토지 등 수용사실 확인서, 갑 제24호증도 같다)의 각 기재에 변론 전체의 취지 및 원고가 자인하는 사실관계에 비추어 알 수 있는 다음의 사정 즉, ㉮ 원고는 이 사건 농지만 소유하고 있었을 뿐인데(원고의 처 오00이 00 00군 00면 0리 000 전 2,593㎡, 같은 면 진리 363전 869㎡, 0북 00군 00면 00리 000-0 전 77㎡를 소유하고 있으나 00시에 거주하는 원고 부부가 위 농지들을 직접 경작한다는 것은 상상하기 어렵다), 이 사건 농지에 각종 채소는 물론 알로에 등 약성식물이나 천사의 나팔꽃 등 화훼식물을 비롯하여 일반적인 농사꾼들조차 경작하기 힘든 각종 다양한 농작물을 직접 경작하려면 상당한 농작물 재배기술이 필요할 것으로 보이는데, 경찰관으로 재직하는 원고가 이러한 재배기술을 가졌다고 볼 근거가 희박한 점, ㉯ 원고는 00시에 거주하고 있음에도 1989. 5. 4.부터 1998. 4. 2.까지는 00경찰서에, 1998. 4. 3.부터 2004. 2. 12.까지는 경찰청에, 2004. 2. 13.부터 2008. 7. 2.까지는 0000경찰청에, 2008. 7. 22.부터 2012. 1. 24.까지는 경찰청에, 2012. 1. 25.부터 2014. 2. 5.까지는 00경찰서에, 2014. 5. 6.부터 2015. 1. 29.까지는 서울관악경찰서에, 2015. 1. 30.부터 현재까지는 0000경찰청에 각 근무하였는데, 경찰관의 업무를 수행하면서, 그것도 주거지에서 꽤 떨어진 서울 등지에 근무하면서 이 사건 농지에서 각종 농작물을 직접 재배(농작업의 2분의 1이상)하였다는 것은 납득하기 어려운 점, ㉰ 원고는 00공사로부터 이 사건농지의 협의취득에 따른 보상금만 지급받았을 뿐 농작물에 대한 손실보상금이나 농업손실에 대한 보상금을 별도로 지급받지는 않은 점 등을 고려하면, 원고가 이 사건 농지를 유증 받은 이후에 적어도 1년 이상 직접 경작한 사실을 그대로 인정할 수는 없다.

Even if it is recognized that the Plaintiff had cultivated the farmland of this case directly for not less than one year, as follows, it should be excluded from the Plaintiff’s cultivation period pursuant to Article 66(14) of the Enforcement Decree of the said Act, and the Plaintiff did not meet the requirements for self-farmland for eight years, the capital gains tax reduction or exemption.

In other words, comprehensively taking account of the purport of the Plaintiff’s statement No. 2, the Plaintiff’s total salary for 2007, approximately KRW 52 million, KRW 54 million for 2008, approximately KRW 54 million for total salary for 2009, KRW 55 million for 2010, KRW 58 million for total salary for 2011, KRW 67 million for 2012, KRW 65 million for total salary for 2013, KRW 67 million for 2013, KRW 67 million for 2013, KRW 67,000 for 205, KRW 67,00 for 205, and KRW 67,000 for 20,000 for 306,000 for 206,000 or more for 306,000,000 for 36,000 won for 206,000.

Article 66 (14) of the Enforcement Decree of the Act on the Protection of Special Taxation, which is an exemplary provision, the plaintiff asserts that the amendment is null and void, but the above argument is without merit as follows.

The main text of Article 69(1) of the Restriction of Special Taxation Act provides that "the tax amount equivalent to 100/100 of capital gains tax shall be reduced or exempted for the income accruing from the transfer of land prescribed by Presidential Decree among the land cultivated by the method prescribed by Presidential Decree, which is not less than eight years by the resident who resides in the seat of such land." Article 66(1) and (6) of the Enforcement Decree of the Restriction of Special Taxation Act concerning "the resident who resides in the seat of such land", and Article 66(4), (11) and (12) of the Enforcement Decree of the Restriction of Special Taxation Act concerning "the direct cultivation by the method prescribed by Presidential Decree."

More specifically, Article 66 (1) of the Enforcement Decree of the Restriction of Special Taxation Act provides that ① “a person who has cultivated while residing in the location of the farmland for not less than eight years (the provisions of each subparagraph of the same Article),” and Article 66 (6) of the Enforcement Decree of the Restriction of Special Taxation Act provides that “in the case of purchase by consultation, expropriation or expropriation, or expropriation under other Acts, the period cultivated in the farmland before the substitution, division, or substitution shall be deemed the period cultivated in the farmland concerned, and the provisions of the main sentence of paragraph (1) shall be applied.” ② Article 66 (4) of the Enforcement Decree of the Restriction of Special Taxation Act provides that “a person who has cultivated the farmland for not less than eight years from the time of acquisition until the time of transfer” and Article 66 (11) of the Enforcement Decree of the Restriction of Special Taxation Act provides that “a person who has succeeded to the farmland under the provisions of paragraph (4) shall continue to cultivate the farmland for not less than one year.”

Article 66 (14) of the Enforcement Decree of the Restriction of Special Taxation Act, which states that the plaintiff's violation of the parent law, stipulates that "the relevant decedent or the resident shall be excluded from the period cultivated by the decedent or the resident concerned during the period of cultivation under paragraphs (4), (6), (11) and (12) of the same Article.If the total amount of the total amount of benefits is more than 30 million won, such period shall be excluded from the period cultivated by the decedent or the resident concerned." This provision is not directly related to "direct cultivation" under Article 66 (13) of the Enforcement Decree of the Restriction of Special Taxation Act.

Meanwhile, Article 69 of the Restriction of Special Taxation Act explicitly limits the scope of "land prescribed by Presidential Decree among the land cultivated by the residents who reside in the location of land" for not less than eight years by the method prescribed by Presidential Decree. Considering the legislative purpose of the above provision for protection of and support for agriculture and the limited scope of preferential measures for tax reduction or exemption from capital gains tax under the Presidential Decree, it can be predicted that the provision that is exempt from capital gains tax under the above provision should be limited only to "where the necessity of land policies is met" among the farmland cultivated for not less than eight consecutive years. Thus, if the provision that excludes the total amount of income from 37 million won exists in the period of taxation, it is reasonable to consider that the above provision is not applicable to "where the residents reside in the location of land for not less than 6 years" and that it would be necessary to establish a provision that excludes the total amount of capital gains tax from the total amount of capital gains tax for not less than 7 years from the total amount of capital gains tax to the residents who reside in the above area for not less than 6 years, it can be included only in the above period of 9 years.

Applicant The plaintiff asserts that the transfer income tax imposed by excluding the farming period before July 1, 2014 based on the above provision on the amendment of the Enforcement Decree is contrary to the general principles of the Constitution which prohibits retroactive legislation and retroactive application to the people, and the legislative intent of the Framework Act on National Taxes. Thus, the above amendment of the Enforcement Decree was newly established while the plaintiff possessed the farmland in this case, but the tax requirement of the transfer of the farmland in this case has not yet been completed at the time of the enforcement of the above amendment of the Enforcement Decree, so the above amendment of the Enforcement Decree in the direction of strengthening the taxation requirement cannot be deemed to go against the principle of retroactive taxation. Thus, the above assertion is without merit.

(v) The Plaintiff asserts to the effect that, if an owner of farmland gains income of at least 37 million won per annum, it uniformly excludes the relevant period from the cultivation period without considering the economic situation of an individual, the size of property and occupation stability, and the degree of exposure to taxable income between the wage income earner and the business income earner, thereby violating the equity in taxation. However, as seen earlier, the amended provision of the above Enforcement Decree is legally stipulated within the delegation scope of Article 69 of the Restriction of Special Taxation Act of the mother corporation. As long as there are grounds for delegation of the mother law as above, there is discretion in administrative legislation as to what criteria should be determined within the delegation scope. Since the amended provision of the above Enforcement Decree provides for income standards of at least 37 million won per annum for both the business income earner and the wage income earner in consideration of the legislative intent of the mother law, it is unreasonable to set the income standards of at least 37 million won per annum or it is merely a arbitrary standard, the Plaintiff's exercise of discretionary power under administrative legislation should be respected. Therefore, the above assertion is without merit.

3. Conclusion

Therefore, the disposition of this case is legitimate, and the plaintiff's claim is dismissed as it is without merit.