Cho High Court Decision 2010Du3763 (O4. 2011)

Since the cause of acquiring farmland is not the cause of inheritance, the period of cultivation before the acquisition shall not be added up.

As long as the cause of acquiring farmland is not inheritance, it shall not be added to the period of cultivation by tide and division, and only the period of self-defense after the acquisition of farmland shall be calculated. Since the period of residing near the seat of farmland after acquisition of farmland falls short of eight years, such period shall not be considered as the period of cultivation, and thus, it does not

2011Guhap1577 Revocation of Disposition of Imposing capital gains tax

Park AA

Head of Donggsan Tax Office

November 16, 2011

December 14, 2011

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The defendant's rejection disposition against the plaintiff on July 6, 2010 shall be revoked.

1. Details of disposition;

A. On December 21, 2006, the Plaintiff consulted with the Korea Land Corporation on the acquisition of public land with respect to the same 00-00 m2,754 m2, the same 00-0 m2, the same 00-0 m2, the same 000 m2,754 m2, the same m200-0 m2, 93 m258 m2, the same 00-0 m258 m2, the same m200-0 m2, and the same 00-0 m2,18 m27 m27 of the same month, and completed the registration of ownership transfer in the future of the Korea Land Corporation on February 26, 2007.

B. On May 28, 2010, the Plaintiff filed a claim for correction with the Defendant for refund of KRW 88,609,320, out of the capital gains tax already paid as above on the ground that each of the instant farmland constitutes farmland for at least eight years pursuant to Article 69 of the former Restriction of Special Taxation Act (amended by Act No. 10406, Dec. 27, 2010; hereinafter the same), but the Defendant rejected the said request for correction on July 6, 2010.

C. Accordingly, the Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on November 17, 2010, but the Tax Tribunal dismissed the appeal on April 4, 201.

[Written Grounds] Unsatisfy, Gap evidence Nos. 5, 6, 10 through 13, 15 through 18, Eul evidence Nos. 1 through 3, the purport of the whole pleadings

2. Whether the disposition of this case is unlawful

A. Summary of the plaintiff's principal

Since the Plaintiff’s early 1900, GabB occupied and cultivated each of the instant farmland from around 1900, and the denial of GabD had continued to possess and cultivate each of the instant farmland, the Plaintiff’s father and father acquired ownership of each of the instant farmland at around 1900 retroactively on the ground of the completion of the prescription period for acquisition of possession under Article 245(1) of the Civil Act, and at least eight years in total, each of the instant farmland should be exempted from capital gains tax on one’s own farmland for at least eight years as prescribed in Article 69 of the former Restriction of Special Taxation Act. Accordingly, the Defendant refused to accept the Plaintiff’s request for correction, which is unlawful.

(b)a recognition;

1) Each of the instant farmland was owned by the State, and the registration of ownership transfer was completed on April 21, 1971 on the ground of the completion of repayment pursuant to Article 11 of the former Farmland Reform Act (amended by Act No. 4817, Dec. 22, 1994).

2) On April 21, 1971, the Plaintiff was 17 years of age at the time of the completion of repayment, and on January 11, 1977, the Plaintiff resided in 00, Jinnam-si, Seoul Special Metropolitan City, the area surrounding each of the farmland of this case, prior to the directors at 000-00, U.S., Ulsan-gu, U.S., the period is about 5 years and 9 months.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 6, 8, Eul evidence Nos. 1 and 2, the purport of the whole pleadings

(c) relevant statutes;

It is as shown in the attached Form.

D. Determination

1) Under the principle of no taxation without law, the interpretation of tax laws and regulations shall be interpreted in accordance with the law, barring any special circumstance, and it shall not be extensively interpreted or analogically interpreted without any reasonable ground. In particular, the strict interpretation of preferential provisions among the requirements for reduction and exemption accords with the principle of fair taxation (see, e.g., Supreme Court Decision 2008Du11372, Aug. 20, 2009). Meanwhile, Article 69(1) of the former Restriction of Special Taxation Act provides that the amount of tax equivalent to 10/100 of capital gains tax on the income accruing from the transfer of land directly cultivated by a resident prescribed by the Presidential Decree who resides in a location of land for eight or more years, and Article 66(1) of the Enforcement Decree of the same Act provides that the transferor shall only be deemed to have acquired land within a Si/Gun/Gu where farmland is located and a person who resides in an area adjacent to a Si/Gun/Gu for which the transferor acquired land for which he/she acquired such land for nine or more years after the acquisition.

2) In light of the above legal principles, since the Plaintiff’s acquisition of each farmland of this case is not the cause of inheritance, but the repayment is completed on April 21, 1971, the Plaintiff’s acquisition of each farmland of this case shall be calculated only after the acquisition of each farmland of this case in calculating the cultivation period under the above provision of the Restriction of Special Taxation Act. According to the above, when the Plaintiff acquired each farmland of this case on April 21, 1971 and the Plaintiff’s acquisition of each land of this case on April 1, 197, U.S.O.O.O.O.O.O.O.O.O.O.O.O.00-000, etc. were less than eight years, and the Plaintiff’s acquisition of farmland of this case does not constitute an acquisition, loss, or alteration of the ownership of farmland of this case from the date of entry into force of the above provision of the Restriction of Special Taxation Act within 10 years prior to the enforcement date of the above provision of the same Act. Thus, the Plaintiff’s assertion under the above premise that ownership of this case’s farmland of this case is no longer effective.

3) Therefore, the instant disposition rejecting the Plaintiff’s request for correction is justifiable.

3. Conclusion

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