Early High Court 201J 2729 ( October 28, 2011)

It is recognized that not less than 1/2 of farming works have been cultivated directly with his own labor in the substitute farmland.

In full view of the fact that it appears that the substitute farmland could have been cultivated and managed from time to time after retirement, the fact that most of the work hours of rice farmers was taken full charge of the number of rice farmers' whole work hours, and the money paid to neighboring residents was shown as the price for the use of agricultural machinery and equipment rather than as the price for entrusted management, it is recognized that not less than 1/2 of the farming work was directly cultivated.

Article 70 of the Restriction of Special Taxation Act

2011Guhap14747 Revocation of Disposition of Imposing capital gains tax

KimA

port of origin

March 2, 2012

March 30, 2012

1. The Defendant’s imposition of KRW 00,000,000 against the Plaintiff on March 11, 201 shall be revoked.

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

The same shall apply to the order.

1. Details of the disposition;

A. On November 1, 2001, the Plaintiff acquired 00-0 square meters and 174 square meters and 1,011 square meters (hereinafter referred to as “previous farmland”) from the non-party B, the mother of the Plaintiff, from the non-party B, who is the mother of the Republic of Korea, from the non-party B, OB-dong 00-0 and the same 00-00,01 square meters, and owned them. The Plaintiff transferred the previous farmland to the non-party D public corporation on the ground of expropriation on October 5, 2007 due to the construction of neighboring roads.

B. On October 17, 2007, the Plaintiff filed a preliminary return on the tax base of capital gains tax on the transfer margin of the previous farmland with the Defendant, applying Article 70(1) of the former Act on Special Cases concerning Tax Restriction (amended by Act No. 9921, Jan. 1, 2010; hereinafter the same) which is a provision on the reduction or exemption of capital gains tax on the farmland substitute land on the grounds that the said farmland price is self-owned as farmland reduction or exemption.

C. On August 28, 2008, the Plaintiff purchased O000-0 1,380 square meters (hereinafter referred to as “alternative farmland”) from Nonparty EEEE on the part of Nonparty EE, which was located in the wife population, and completed the registration of ownership transfer.

D. However, on March 11, 2011, the Defendant denied the reduction or exemption of capital gains tax on the ground that the Plaintiff cannot be deemed as the Plaintiff’s own farmland as a result of the on-site verification survey on substitute farmland, and imposed KRW 00,000,000 on the Plaintiff on March 11, 201 following the notice of tax advance notice and the request for pre-assessment review (hereinafter “instant disposition”).

E. On October 28, 201, the Plaintiff appealed against the instant disposition and filed an appeal with the Tax Tribunal, but the said claim was dismissed on October 28, 201.

[Ground of recognition] Facts without dispute, Gap evidence 1 through 6, 11, Eul evidence 1 and 2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) The Plaintiff asserts that the disposition of this case by the Defendant, which did not recognize the reduction or exemption of capital gains tax, is unlawful, notwithstanding the fact that the Plaintiff acquired substitute farmland within one year from the date of transfer of previous farmland and has been directly cultivated until the present farmland, and the income from the transfer of previous farmland is subject to reduction or exemption of capital gains tax due to substitute farmland under Article 70(1) of the former Restriction of Special Taxation Act.

“(2) As to this, the Defendant had worked for several companies from 2003 to 2009, and at the time of the Defendant’s on-site verification investigation, neighboring residents’ OO stated that the Plaintiff had been engaged in the work of dispute settlement of substitute farmland, the gathering of fry, and the removal of fry, etc., and that the substitute farmland is cultivated as a lot without the division between the two parties, etc., adjacent to the farmland owned by OOO, it cannot be deemed that the Plaintiff directly cultivated the substitute farmland, and thus, the instant disposition is lawful.”

It is as shown in the attached Form.

(c) Fact of recognition;

(1) On October 31, 2005, the Plaintiff graduated from the Agricultural University in 1992, and then moved into 00,000,000, the neighboring area of the substitute farmland, and has been residing in the said domicile until now. The distance from the substitute farmland to the Plaintiff’s address is about 25 kmn level, and approximately about 25 - 30 minutes are required by the Plaintiff’s vehicle.

(2) The Plaintiff acquired substitute farmland and then owns a rice farm. The area of the said farmland (=1,380 square meters) is approximately 2 marblings, which is the data of the Statistics Korea, and according to the “FF’s data”/work-level hours, the total working hours are merely about 20 hours per year when performing a rice farmer’s work in the area of farmland similar to the farmland as a substitute for farmland. In fact, a rice farmer is a farming period from April to September of each year, and the other period is a farming period, and the degree of the labor force is relatively insignificant and the need for regular work is low compared to other farming companies.

(3) The Plaintiff, while carrying out rice farming workers, was in charge of mechanical works with a total of KRW 00,000 per math to neighboring residents' OO. However, the rest of maths, the joint organization, interior, and extraction of maths, most of which were carried out directly by himself, and the ratio of the mechanical work hours and the number of hours during the entire agricultural work hours to 3:7.

(4) At the time of the Defendant’s on-the-spot inspection of alternative farmland, O stated that “IO: “IO am gymbling so far as I had the Plaintiff; I am gymbling with the Plaintiff; I am gymbling with the Plaintiff with no agricultural machinery; I am gymbling with the Plaintiff to the effect that I would like to receive work fees from the Plaintiff; and I am present at this court as a witness, “I am gymbling with the Plaintiff when I am gymbling, I am gymbling, etc., and gyming with gyming., when I am gyming with the working hours, I am

(5) From May 2009 to August 2010, the Plaintiff directly purchased fertilizers, agrochemicals, and other goods necessary for the cultivation of the said farmland at its own expense from around May 2009 to around August 201, and even at the harvest season, he directly harvested crops from the substitute farmland and sold them to others.

[Ground of Recognition] Facts without dispute, Gap evidence 7, 8, 10, 12 through 17 (including paper numbers) and images, witnessO's testimony and the purport of the whole pleadings

D. Determination

(1) According to Article 70(1) of the former Restriction of Special Taxation Act and Article 67(1), (2), and (3)1 of the former Enforcement Decree of the Restriction of Special Taxation Act (wholly amended by Presidential Decree No. 20620, Feb. 22, 2008; hereinafter the same), in order to fall under the reduction or exemption of capital gains tax due to the substitute land for farmland, ① land and newly acquired land shall be farmland. ② If a person resides in the previous location of farmland for at least three years, he/she shall grow directly, and in addition, he/she shall reside in the new location of farmland for at least three years; ③ his/her residence and cultivation shall begin within one year from the date of transfer of the previous land; ④ The period between the date of transfer of the previous land and the date of acquisition of the new land shall be within one year; ⑤ The area of farmland to be newly acquired shall be at least 1/2 of the value of the transferred farmland shall be at least 1/3 of the value of the farmland which is directly owned by a resident or a person under his/her own labor force.

(2) Based on the above legal principles, whether the Plaintiff cultivated substitute farmland for three or more years under his responsibility and calculation, the health stand, namely, the following circumstances revealed by the facts of recognition as seen earlier: (a) the Plaintiff appears to have been able to cultivate and manage substitute farmland from time to time through leaving the country or weekend time, etc.; (b) the work of substitute farmland in light of the type of crops cultivated in substitute farmland or the contents of the cultivation work, etc. do not necessarily seem to have to have a certain degree of work in substitute farmland at all times or at a certain interval; (c) the amount, time, method, etc. of the work paid to O appears to have been paid more simply as the cost for entrusted management in light of the amount, time, etc., the amount of money paid to O appears to have been paid to O is not simply as the use fee for the agricultural machinery; and (d) the Plaintiff and O was in full charge of works to occupy most part of entire work hours in substitute farmland, and (e) the Plaintiff and O had not acquired the said substitute farmland within three or more years after its acquisition.

(3) Therefore, since the substitute farmland of this case, which the Plaintiff is deemed to have cultivated directly for not less than three years, falls under the reduction of capital gains tax pursuant to Article 70 of the former Restriction of Special Taxation Act, the Defendant’s disposition of this case on a different premise is unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition.