Whether it is subject to exemption from capital gains tax due to farmland as prescribed by the Restriction of Special Taxation Act.

It is difficult to view that the Plaintiff had cultivated farmland before transfer by inserting one-half or more of its own labor force for three years, and it is difficult to regard the newly acquired farmland as having been cultivated by itself, and there is no other evidence to acknowledge it.

Article 70 of the Restriction of Special Taxation Act for Substitute Land for Farmland

2016Guhap61472 Revocation of Disposition of Imposing transfer income tax, etc.

Hyo

○ Head of tax office

August 23, 2016

November 15, 2016

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s imposition of capital gains tax of 36,527,180 won for the year 2014 and special rural development tax of 1,289,190 won for the Plaintiff on June 1, 2015 shall be revoked.

1. Details of the disposition;

A. On June 10, 2014, the Plaintiff sold 231,13,000 square meters of land to the Korea Land and Housing Corporation in accordance with the consultation procedure prescribed by the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (hereinafter “instant land”).

B. On June 16, 2014, the Plaintiff acquired the ownership of 00 ○○○○○○-ri 141 m2,319 m2 (hereinafter “instant land”).

C. The Plaintiff filed an application with the Defendant for reduction or exemption of capital gains tax on the transfer of the instant land No. 1 in accordance with the provisions on reduction or exemption of capital gains tax on the farmland substitute land prescribed by Article 70 of the former Restriction of Special Taxation Act (amended by Act No. 13560, Dec. 15, 2015; hereinafter the same). However, the Defendant did not accept the said application, and on June 1, 2015, decided and notified the Plaintiff of KRW 36,527,180, capital gains tax on the transfer of the instant land No. 1 in the year 2014 (hereinafter “instant disposition”).

D. On August 31, 2015, the Plaintiff appealed and filed a petition with the Tax Tribunal for a trial seeking the revocation of the instant disposition, but the judgment dismissing the Plaintiff’s claim was rendered on November 26, 2015.

Facts that there is no dispute over recognition, Gap's No. 1, 2, 4, and Eul's No. 1 (including all evidence attached with a serial number), the purport of the whole pleadings.

2. Determination on the legitimacy of the instant disposition

A. Summary of the plaintiff's assertion

The Plaintiff had resided in ○○○ City where the land of this case was located for more than three years and left rice shed in the above land, and continued to cultivate the land of this case for more than three consecutive years after acquiring the land of this case within one year from the date of transfer of the above land. Therefore, the transfer income tax on the income accrued from the transfer of the land of this case under Article 70 of the former Restriction of Special Taxation Act shall be reduced in full.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) Facts of recognition

Gap evidence 6-1, 2, Gap evidence 7, 8, Gap evidence 12-3, Eul evidence 2-1 through 5-5

The following facts can be acknowledged in full view of each entry and the purport of all pleadings:

A) In around 2004, the Plaintiff became a member of ○○○○ Company and worked in ○○○○○○○○○○-si A factory (hereinafter referred to as “A factory”) and worked in 2006 at a BB factory located in ○○○○-Gun 112 (hereinafter referred to as “B factory”). From 2006, the Plaintiff was serving in the AA factory and B factory, while engaging mainly in a fair management position from 2004 to 2013, and obtained a total of KRW 532,018,000,000 in annual salary from 2004 to 60 million.

B) From November 23, 2005, the Plaintiff resided in ○○○○ apartment, ○○○dong, to the present day. The distance from BB factory to the Plaintiff’s residence requires 5.79km for 51 minutes with the Plaintiff’s 45.79km, and the distance from B factory to B factory to the 1 and 2 land is about 41km for 40 minutes with the vehicle via an expressway.

C) The details of purchase of agrochemicals and fertilizers necessary for rice farmers by the Plaintiff are limited to KRW 22,840 in total on five occasions as follows. There is no subsequent acquisition of land No. 2 in this case.

D) On October 2013, the Plaintiff did not have any details of sales other than selling rice to ○○ Agricultural Cooperative for KRW 683,200, and did not receive rice subsidies from 2011 to 2015.

2) In addition to the above facts of recognition, the testimony of the witness Kim ○, a witness Kim ○, did not have the Plaintiff engaged in the farming work each month, but did not appear in ordinary days since the Plaintiff was on Saturdays and Sundays, and the Plaintiff did not have observed the mixed farming work and did not appear together with neighboring residents and their family members. Thus, it is difficult to view that the above testimony alone was cultivated by investing the land No. 1 in 3 years or 1/2 or more, and it is difficult to view that the Plaintiff cultivated the land No. 2 of this case by itself for 3 years after acquiring the land No. 2 of this case, and there is no evidence to acknowledge it otherwise.

Therefore, the Plaintiff’s exemption from capital gains tax due to farmland substitute land under the former Restriction of Special Taxation Act

Therefore, the plaintiff's assertion is without merit.

3. Conclusion

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