Seocho 2010west 222 (Law No. 31, 2010)

It is difficult to recognize as being a serious one for not less than eight years.

It is difficult to recognize that the transferred land has been cultivated directly for not less than eight years in view of the fact that the construction business entity operates a construction business and obtains income of not less than a certain amount each year, and that the operator of an orchard has almost failed to submit farming materials.

2010Gudan26059 Revocation of Disposition of Imposing capital gains tax

XX

Head of Eastern Tax Office

August 23, 2011

October 18, 2011

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of capital gains tax of KRW 98,486,370 and special rural development tax of KRW 4,924,310 on April 12, 2010 shall be revoked.

1. Details of the disposition;

A. On July 12, 1988, the Plaintiff acquired and possessed a house located at 000-00 and 00-00 square meters in Jung-gu, Seoul (hereinafter “instant land”) such as 00-dong 00-2 and 00-0 square meters, and transferred the instant land as a public site (national rental housing business complex) to the Work on January 20, 2009.

B. On January 31, 2009, the Plaintiff directly cultivated the instant land for at least eight years and applied for reduction or exemption of capital gains tax pursuant to Article 69(1) of the former Restriction of Special Taxation Act (amended by Act No. 9921, Jan. 1, 2010; hereinafter the same).

C. However, on April 12, 2010, the Defendant deemed that the Plaintiff had not cultivated the instant land directly for not less than eight years, and determined and notified the transfer income tax of KRW 98,486,370 and special rural development tax of KRW 4,924,310 (hereinafter “instant disposition”).

[Ground of recognition] Unsatisfy, Gap evidence 1, 2, Eul evidence 1 (including paper numbers), the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

While the Plaintiff was running an Oconstruction (individual enterprise or stock company) during the possession of the instant land, Oconstruction did not have much amount to small scale, and resided in the location of the instant land and cultivated the instant land directly for at least eight years. Therefore, even if the Plaintiff met the self-sufficiency requirement, which is the requirement for capital gains tax reduction or exemption, the instant disposition otherwise reported is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

(c)a recognition;

(1) Plaintiff’s business, etc.

(A) From March 15, 198 to December 31, 1998, the Plaintiff engaged in construction business, etc. as the representative director of O Construction (hereinafter referred to as "O Construction") from January 15, 1999, who was converted into an OO Construction as a corporation.

(B) The Plaintiff, who is a representative director of the Oconstruction, was engaged in in in in inn business from May 1, 200 to September 6, 2000, Daejeon-gu OOdong 00 to September 6, 200.

(C) The Plaintiff, while running the O construction from around 192 to 1999, has earned income of at least KRW 50 million each year from around 2000 to around 2008, and has earned income of KRW 15 million each year from around 2000 to around 2008.

(D) From November 17, 1984, the Plaintiff resided mainly in the Dongdong-dong, Seoul, 000-00, but on February 26, 1992, there was a tension of moving the resident registration No. 000,000,000, and from September 23, 2002, the Plaintiff had resided for approximately three years in the Namyang-si BBdong, 00-0, B2 apartment 000, 000.

(2) Admission to membership, etc.

(A) On December 17, 2001, the Plaintiff joined an agricultural cooperative association (hereinafter referred to as the “cooperative”) as a member, and the number of contribution units is 3.00 shares (5.00 won per unit) and the amount of contribution is 15 million won.

(B) On November 3, 2001, the Plaintiff submitted to the Union an application for membership, accompanied by a written confirmation of the fact of cultivation, etc., and when transferring the instant land, the Plaintiff also received agricultural compensation from the GATT Corporation.

[Reasons for Recognition] The above evidence, Gap evidence Nos. 3 through 5, 8 (including each number), Eul evidence Nos. 2 and 3, and the purport of the whole pleadings

D. Determination

Pursuant to Article 69(1) of the Restriction of Special Taxation Act and Article 66(1) and (13) of the Enforcement Decree of the Restriction of Special Taxation Act, a transferor shall live in a Si/Gun/Gu where farmland is located or a Si/Gun/Gu adjacent thereto, and directly cultivate the relevant land for at least eight years from the time he/she acquired the relevant land until the time he/she transfers the land. On the other hand, a "direct cultivation" means that the transferor engages in cultivating the crops or growing perennial plants on his/her own land at all times or cultivating or growing them with his/her own labor.

In this case, according to the above evidence, as to whether the Plaintiff satisfies the requirements for reduction and exemption of capital gains tax, the Plaintiff acquired the instant land from July 12, 1988 to January 20, 2009, and registered as residents at the location of the instant land during the period excluding a part of the period from the acquisition of the instant land to January 20, 209, and can be acknowledged that the Plaintiff joined the association around 2001. However, the above facts and the above evidence can be acknowledged as follows: (i) the Plaintiff, while operating the OO construction, obtained income of at least KRW 50 million each year from around 1992 to around 199; and (ii) the Plaintiff did not have any other evidence to acknowledge that the Plaintiff had resided in the instant orchard with the land adjacent to the instant orchard for more than 3 years; and (iii) the Plaintiff did not directly received farmland from the Plaintiff’s farmland and its adjacent farmland for more than 15 million won.

E. Sub-committee

Therefore, since the Plaintiff cannot be deemed to meet the requirements for reduction or exemption of capital gains tax, the instant disposition that the Plaintiff reported as such is lawful.

3. Conclusion

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