Cho-2015-China-4323 (Law No. 19, 2015)

It does not fall under farmland at the time of transfer and does not exclude the application of capital gains tax reduction.

Since the instant land cannot be deemed to be temporarily in a state of temporary closure, it cannot be deemed farmland as of the date of transfer, it does not constitute land subject to non-taxation of capital gains tax.

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

2015Gudan5977 Revocation of Disposition of Imposing capital gains tax, etc.

Section AA

BB Director of the Tax Office

July 6, 2016

August 10, 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 capital gains tax of KRW 10,221,575, and additional tax of KRW 10,221,575, paid to the Plaintiff on July 24, 2015

The imposition of KRW 1,002,736 shall be revoked.

1. Details of the disposition;

A. On May 6, 1989, the Plaintiff acquired and sold 100,000,000 won to OO on June 13, 2014 (hereinafter “the instant transfer”). The Plaintiff applied the foregoing provision to the Defendant on September 25, 2014 by applying the said provision to the effect that the instant land constitutes “self-sufficient farmland for not less than eight years” under Article 69(1) of the Restriction of Special Taxation Act.

B. On July 24, 2015, the Defendant denied the application for reduction or exemption of capital gains tax by deeming that each of the instant lands was not farmland at the time of transfer, and rendered a disposition imposing capital gains tax of KRW 10,221,575, and additional tax for additional payment 1,002,736 on the Plaintiff (hereinafter collectively referred to as “instant disposition”). The Plaintiff dissatisfied with the instant disposition and filed a request with the Tax Tribunal on August 19, 2015, but the Tax Tribunal dismissed the application on November 13, 2015.

[Ground of recognition] Unsatisfy, Gap evidence 1 to 4, Eul evidence 1 and 2 (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) After acquiring the instant land from the date of the acquisition to the date of 2003, the Plaintiff was temporarily closed for about 10 years from the date of the acquisition to the date of the transfer of the instant land, but it was for the management of solid water. At present, even though the instant land had been 3,4gs and miscellaneouss at the level of seedlings, it can be formed at any time, and the instant land can be carried out at any time, and the said land is in a state of temporary closure, and if it is transferred in a state of temporary closure, it shall be deemed the transfer of farmland. Accordingly, the reduction and exemption provisions for self-arable farmland under Article 69(1) of the Restriction of Special Taxation Act should be applied, but the instant disposition on different premise should be revoked.

(2) The Plaintiff reported the transfer income tax within the prescribed period, but it is illegal to impose the penalty tax for failure to pay.

B. Relevant statutes

Article 69 of the former Restriction of Special Taxation Act (Amended by Act No. 12853, Dec. 23, 2014);

(1) Where a resident prescribed by Presidential Decree who resides in farmland at the seat of farmland transfers any farmland prescribed by Presidential Decree to the Korea Rural Community Corporation established under the Korea Rural Community Corporation and Farmland Management Fund Act or a corporation prescribed by Presidential Decree, the main business of which is agriculture (hereafter referred to as "agricultural corporation" in this Article) no later than December 31, 2015, not less than three years shall be reduced of an amount of tax equivalent to 100/100 of capital gains tax on the income accruing from the transfer of land prescribed by Presidential Decree, among land cultivated directly by means prescribed by Presidential Decree for not less than eight years (where

Article 66 of the former Enforcement Decree of the Restriction of Special Taxation Act (Amended by Presidential Decree No. 25590, Sep. 11, 2014);

(4) "Land prescribed by Presidential Decree" in the main sentence of Article 69 (1) of the Act means the farmland that has been cultivated by himself/herself for not less than eight years (three years in cases where farmland eligible for the payment of management transfer subsidies under paragraph (3) is transferred to the Korea Rural Community Corporation or to a corporation under paragraph (2)) between the time of acquisition and the time of transfer, excluding that falling under any of the following subparagraphs:

(5) The farmland subject to paragraph (4) shall be based on the farmland as of the date of transfer under Article 162 of the Enforcement Decree of the Income Tax Act: Provided, That in any of the following cases, the standards classified in the following subparagraphs shall govern (hereinafter referred to as the "standards"):

C. Determination

(1) Whether temporary closure is temporary closure

Under the principle of no taxation without law, the interpretation of tax laws and regulations shall be interpreted in accordance with the text of the law, barring any special circumstance, regardless of whether they are taxable or non-taxable requirements or tax reduction or exemption requirements, and shall not be extensively interpreted or analogically interpreted without reasonable grounds. In particular, it accords with the principle of fair taxation (see Supreme Court Decision 2011Du20116, Dec. 13, 201).

Meanwhile, in order for the Plaintiff to have the capital gains tax reduced or exempted pursuant to related Acts and subordinate statutes, such as Article 69(1) of the former Restriction of Special Taxation Act and Article 66(3) and (4) of the Enforcement Decree of the former Enforcement Decree of the Restriction of Special Taxation Act, the Plaintiff must directly cultivate the relevant land while living in the location of farmland for at least eight years, as of the date of transfer, and the relevant land shall be farmland as of the date of transfer, and land not actually cultivated as of the date of transfer shall not be deemed farmland as of the date of transfer, unless it is used as farmland by the landowner or by another person, or is in a temporary state of absence or temporary absence (see Supreme Court Decision 2006Du13183, Apr. 11, 2008). Furthermore, the burden of proving the requirements for reduction or exemption lies on the taxpayer who asserts it (see Supreme Court Decision 90Nu6293, Apr. 23, 191).

In light of the above legal principles, we examine the plaintiff's assertion that the plaintiff's 10-year agricultural company did not set up a 10-year agricultural company. Accordingly, according to each image of Gap evidence 5 and Eul evidence 3 and 5 (including the paper numbers), it is recognized that the land in this case is hard to miscellaneous and even trees. It is difficult to see that the objective phenomenon of the land in this case at the time of transfer was planned to restore farmland. And even according to the plaintiff's assertion, it is hard to see that the land in this case was not cultivated for the purpose of water management, and it is difficult to see that the land in this case was temporarily closed with the intention of selling the land in this case without the management, and therefore, it cannot be deemed that the land in this case is temporarily in a state of temporary closure, and it cannot be deemed that it is farmland as at the date of transfer, and thus, it does not constitute the land subject to non-taxation of capital gains tax. Accordingly, the plaintiff's assertion in this part is not accepted.

(2) Whether the imposition of additional tax in bad faith is legitimate

If a taxpayer fails to report or pay all or part of the income tax at the time of the return on the expected return on the transfer income, and fails to make the final return on the legitimate tax amount by the deadline for the final return on the transfer income tax, at least in imposing the transfer income tax after the deadline for the final return on the transfer income, an additional tax on negligent return and an additional tax may be imposed on a legitimate tax amount exceeding the amount of tax voluntarily reported and paid (see Supreme Court Decision 2000Du5944, Apr

In the case of transfer of land, the transfer date shall be the date of settling the price of the relevant asset (Article 98 of the Income Tax Act) and the transferor shall file a return on the tax base of capital gains tax within two months from the last day of the month to which the transfer date belongs (Article 105 of the Income Tax Act). Thus, the final return deadline of capital gains tax on the land of this case is August 31, 2014, which is two months from the last day of the month to which the transfer date belongs, the transfer date belongs, but since the date falls on a legal holiday, it shall be September 1, 2014, which is the following day. According to the evidence above, the plaintiff is recognized only as having filed an application for reduction or exemption of capital gains tax by September 25, 2014, and there is no evidence to acknowledge that the plaintiff filed a final return on the tax base of the final return within the due date, and thus, it is justifiable to impose an additional tax for additional payment under the Income Tax Act in

Therefore, we cannot accept this part of the plaintiff's assertion.

3. Conclusion

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