Seocho-2016- Busan District Court-3609 ( November 28, 2016)

It is not enough to recognize that farmland was directly cultivated for 8 years or longer.

In view of the size of land owned under the farmland ledger and repeated real estate transactions, etc., it is deemed that the real estate transactions rather than farming are deemed real estate transactions for profitting from the market price, and thus, it cannot be deemed that farmland was cultivated directly for

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

2017Guhap5001 Revocation of Disposition of Imposing capital gains tax, etc.

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○ Head of tax office

2017.04.25

2017.05.30

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The Defendant’s disposition of imposition of KRW 00,00,000 on August 1, 2016 against the Plaintiff was revoked.

1. Details of the disposition;

A. From November 5, 2004 to April 24, 2012, the Plaintiff acquired KRW 00,000 square meters in Ri 】 (i) 】 (ii) 】 (iii) 00,000,000 square meters in total, and transferred to △△△ on September 1, 2015. From November 5, 2004 to April 24, 2012, the Plaintiff acquired KRW 00,000 in total, and transferred each of the instant lands to △△△△△△ (i) 】 (ii) 】 (iii) 】 (iv) 】 (v) 】 (v) 】 (v) 】 】 (v) 】 x (v) 】 00,000 square meters in total, and (v) ○○○○○○○○○ (iv) 00,000 square meters in total, and (v) excluding each of the instant lands to △△△△ on September 10, 200.

B. On November 30, 2015, the Plaintiff filed an application for full reduction of or exemption from capital gains tax on the ground that each of the instant land constitutes one of its own farmland for eight years under Article 69 of the former Restriction of Special Taxation Act (amended by Act No. 13560, Dec. 15, 2015; hereinafter the same) upon reporting the transfer income tax for the period of 2015 to the Defendant.

C. As a result of the investigation of capital gains tax on the Plaintiff, the Defendant determined that the Plaintiff failed to meet the requirements for reduction and exemption of self-farmland for eight years, and imposed capital gains tax of KRW 00,000,000 on the Plaintiff on August 1, 2016 for the taxable year to which it belonged in 2015 (hereinafter “instant disposition”).

D. The Plaintiff appealed and filed an appeal with the Tax Tribunal on September 30, 2016, but was dismissed on November 28, 2016.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 3, Gap evidence Nos. 1 through 3 (including branch numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Relevant statutes;

Attached Form 2 shall be as shown in attached Table 2.

3. Whether the instant disposition is lawful

A. The plaintiff's assertion

Since the Plaintiff cultivated the instant land, which is the spouse of the Plaintiff, and directly cultivated the instant land for not less than eight years, the Defendant’s disposition based on a different premise is unlawful.

B. Determination

1) The burden of proving the fact that the transferred land has been cultivated directly for at least eight years is imposed on the person liable to pay capital gains tax pursuant to the relevant provision (see, e.g., Supreme Court Decision 94Nu996, Oct. 21, 194); Article 69(1) of the former Restriction of Special Taxation Act and Article 66(1) and (13) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 26070, Feb. 4, 2015); in order to obtain capital gains tax reduction or exemption, the Si/Gun/Gu where the relevant farmland is located; the Si/Gun/Gu where the relevant farmland is located; or the Si/Gun/Gu where the relevant farmland is located; or the area within 20 km in a straight line from the relevant farmland; and in this case, the term "direct cultivation" means that a resident engages in the cultivation of crops or the growing of perennial plants on his/her own farmland at least 1/2 with his/her own labor force; and thus, the meaning of 201/20 or more

2) In light of the following circumstances acknowledged by comprehensively taking account of the respective descriptions of evidence Nos. 3 through 5 and the purport of the entire pleadings, it is insufficient to acknowledge that the Plaintiff had cultivated directly from each land of this case for not less than 8 years, and there is no other evidence to acknowledge otherwise.

(1) Article 69 of the former Restriction of Special Taxation Act is reasonable in that Article 69 of the same Act intends to protect and promote the development and encouragement of agriculture by reducing the tax burden with respect to land which a resident in the seat of farmland has cultivated directly for at least eight years, on the other hand, the relevant provision may be abused as a means of tax evasion.

② The Plaintiff’s farmland ledger, including the instant land, states that the Plaintiff cut a total of 33,388 square meters at AA, BB, Gyeongnam-gun, and DDR members, but it is unreasonable to deem that the Plaintiff directly cultivated the instant land. In addition, the farmland ledger is considerably a case where the Plaintiff prepares and keeps only formally for various tax reduction and exemption for farmland management and the efficient implementation of agricultural policies. Considering the fact that there is considerable need for administrative agencies to examine the farmland ledger, it is difficult to deem that the Plaintiff has cultivated each of the instant land solely on the basis of the entries in the farmland ledger.

③ Park, a spouse, runs a real estate brokerage business. From 2002 to 2015, the Plaintiff acquired 70 parcels of real estate in AA, BB, and DD and transferred 50 parcels of real estate. The Plaintiff’s repetitive real estate transactions, such as the Plaintiff, seem to be a real estate transaction for the benefit of market price, not for farming.

④ The Plaintiff acquired each of the instant land in installments from November 2004, and did not properly state the particulars of the acquisition and cultivation of each of the instant land to a tax official, on the grounds that he did not know in detail.

4. Conclusion

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

(c)