The burden of proving the fact, etc. directly cultivated as a requirement for reduction or exemption of capital gains tax for self-arable farmland exists on the taxpayer who asserts reduction or exemption of capital gains tax.

If a farmland owner mainly cultivates farmland by using another person's labor in a state with an occupation other than agriculture, etc., he/she shall be excluded from the capital gains tax reduction and exemption.

Article 69 (Abatement or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

2017Guhap2498 Revocation of Disposition of Imposing capital gains tax

LAA

The director of the tax office of Luxembourg

December 22, 2017

January 19, 2018

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 and special rural development tax on July 1, 2016 reverted to the Plaintiff in 2012.

213,652,020 won shall be revoked.

1. Details of the disposition;

A. On November 9, 2012, the Plaintiff completed the registration of transfer of ownership on the ground of an agreement on the land for public use, such as ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○

B. Upon filing a preliminary return of capital gains tax on January 31, 2013, the Plaintiff filed an application for reduction or exemption of capital gains tax on each of the instant land for the reason that the Plaintiff had done self-defluence for at least eight years, pursuant to Article 69 of the former Restriction of Special Taxation Act (Amended by Act No. 11614, Jan. 1, 2013; hereinafter the same shall apply) and Article 66(13) of the former Enforcement Decree of the Restriction of Special Taxation Act (Amended by Presidential Decree No. 24368, Feb. 15, 2013; hereinafter the same shall apply).

C. As a result of the Defendant’s tax investigation into capital gains tax on the Plaintiff from March 21, 2016 to April 8, 2016, the Plaintiff deemed that there was no self-sufficiency for at least eight years in each of the instant land, and excluded capital gains tax on self-employed farmland, and on July 1, 2016, the Defendant corrected and notified the transfer income tax on the Plaintiff for the year 2012 as KRW 228,558,110 (including the capital gains tax on the Plaintiff for special rural development) (hereinafter “instant disposition”).

D. The Plaintiff dissatisfied with the instant disposition and filed a request for pre-assessment review on May 30, 2016, with the Director of the Regional Tax Office of Madern Regional Tax Office on September 28, 2016, but was dismissed on October 26, 2016.

E. On January 17, 2017, the Plaintiff filed an appeal with the Tax Tribunal. On May 2, 2017, the Tax Tribunal rendered a decision to dismiss the relevant tax amount by applying the reduction or exemption of capital gains tax under Article 69(1) of the former Restriction of Special Taxation Act with respect to the part on the land of this case among the imposition of capital gains tax and special rural development tax on May 2, 2017 (excluding the portion on the claim to revoke imposition of capital gains tax on the land of this case) and the remainder of the Plaintiff’s request for adjudication [including the claim to revoke imposition of capital gains tax on the land of this case 1].

[Reasons for Recognition] Unsatisfy, Gap 1 to 8 evidence, Eul 1 evidence (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

After purchasing the land of this case on December 20, 1986, the Plaintiff resided in the land of this case from January 24, 200 to around 700 meters from the land of this case and the land of this case from November 9, 2012 (excluding the period from September 1, 2005 to March 13, 2008) 3,749 days from the time when the land of this case was expropriated (excluding the period from September 1, 2005 to March 13, 2008). Thus, the Defendant’s disposition of this case, which was premised on the premise that the Plaintiff did not do not do so for at least eight years from the land of this case, shall be revoked as unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Article 69(1) of the former Restriction of Special Taxation Act and Article 66(1) and (13) of the former Enforcement Decree of the Restriction of Special Taxation Act provide that a person shall directly cultivate the relevant farmland while residing in a Si/Gun/Gu where the relevant farmland has been located for at least eight years, in an area within a Si/Gun/Gu adjacent to the relevant farmland or in an area within a straight distance of 30 kilometers from the relevant farmland. In this case, "direct cultivation" means that a resident engages in cultivating crops or growing perennial plants on his/her own land or growing them by using his/her own labor. Therefore, the meaning of "one-2 or more self-help" refers to the interpretation as to whether farmland has been cultivated directly (see, e.g., Supreme Court Decision 201Du8423, Sept. 30, 2010). However, the person liable to pay capital gains tax cannot be deemed as either a person who has been directly or indirectly transferred his/her own land to another person (see, e.g., Supreme Court Decision 201201Du4.

2) In light of the above legal principles, the following facts are acknowledged in light of the following facts, which seems to conform to the Plaintiff’s assertion in light of the following: (a) the statement of evidence Nos. 9 through 19, the witness B, and the testimony of the highestCC as to the instant case, and the purport of the entire argument.

① On January 24, 200, the Plaintiff’s mother, at a distance of about 700 meters from the instant land No. 1 and 700 meters, completed a move-in report to ○○○, Macton, which is the place of residence of SongD, and had his resident registration place in the same domicile until June 11, 2013.

② In the farmland ledger, the Plaintiff stated that the Plaintiff cut rice from the land of this case from April 21, 2003 to November 15, 2012.

③ According to the sales revenue by each trader issued by △△△ Nonghyup branch, △△△△ branch, the Plaintiff’s mother, for a period from May 7, 2008 to June 1, 201, the Plaintiff’s mother, purchased agricultural chemicals, fertilizers, etc. at △△△ branch and purchased tax-free petroleum for agricultural machinery in 2008 and 2009.

④ Around 1st century, a village in the vicinity of the land in this case was sent B, a farmland management member, a development chairperson KimE-E prepared a letter of confirmation of farming to the effect that the Plaintiff was self-filled of rice, seedlings, etc. on the land in this case.

3) However, in light of the following circumstances acknowledged in light of the aforementioned evidence and evidence Nos. 2 through 5’s overall purport of pleading, it is insufficient to recognize that the Plaintiff was engaged in cultivating crops or cultivating at least 1/2 of farming work with labor on the land of this case on the sole basis of the facts acknowledged in the above 2). Therefore, the instant disposition is lawful on the ground that the Plaintiff does not constitute a case where capital gains tax may be reduced or exempted 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, etc.

① 원고는 1990. 10. 1.부터 2005. 8. 31.까지, 2006. 10. 16.부터 2008. 3. 13.까지의 기간 동안 ○○시 ○○면 ○○로 ○○에 있는 ■■조합중앙회 ○○○○훈련원에서 근무하였고, 2005. 9. 1.부터 2006. 10. 15.까지는 ○○○도 ○○군에 있는 ■■조합중앙회○○○○훈련원에서 근무하였는데, 위 근무지들은 이 사건 제1토지에서 50km 이상 떨어져 있다. 따라서 원고가 이 사건 제1토지 부근인 ◎◎ ○○구 ○○동 ○○에 거주하였다는 주장은 믿기 어렵고, 원고는 원고의 배우자 양FF의 주민등록상 주소지인 ◎◎ ○○구 ○○로 ○○번길 ○○, ○○호(○○동, ○○○○빌라)에 거주하였다고 봄이 타당하다. 원고도 2016. 3. 22. 양도소득세 부과에 관한 조사를 받으면서, 자신은 실제로 배우자의 주소지인 ◎◎ ○○구 ○○로 ○○번길 ○○, ○○호(구○○동, ○○○○빌라)에서 거주하면서 직장인 ○○○○훈련원에 출퇴근 하였고, 농사일이 바쁠 때면 ◎◎ ○○구 ○○동 ○○에 있는 부모님댁에서 일부 출퇴근하였다는 취지의 확인서를 작성하였다.

② 또한 원고가 2008. 3. 13. ■■조합중앙회를 퇴직한 이후에 이 사건 제1토지를 양도하기 전까지 원고에게 아래 표 기재와 같이 근로소득이 발생하여, 원고가 2008. 3. 13. 퇴직한 이후에도 전적으로 농업에 종사한 것은 아니라고 판단된다(표 생략).

③ In light of the distance between the Plaintiff’s land No. 1 and the Plaintiff’s residence, the Plaintiff’s occupation and position, etc., it is difficult to view that the Plaintiff engaged in the farming work on the land No. 1 after the time prior to or after the time of normal work. If the Plaintiff engaged in the farming work, most of the said time appears to be possible at the weekend. Since the area of the land No. 1 is 2,998 square meters ( around 906 square meters), it is very difficult for the Plaintiff, alone, to take a farmer’s house from the land No. 1 of this case, and it is deemed that there was no choice but to receive a considerable degree of assistance from neighboring residents, etc.

④ We examine the contents and degree of the labor force invested by the Plaintiff in the land No. 1. Although the Plaintiff’s mother owned culb, blight and harmful insects control devices, as seen earlier, after purchasing free oil for agricultural machinery in 2008 and 2009, it appears that the Plaintiff did not use the above agricultural machinery after that time. In this regard, the witness SongB appears to have not used the above agricultural machinery after that time. In this court, the witness’s testimony is difficult to view that it was difficult to view that the Plaintiff was engaged in culbing the agricultural machinery in this case, including the Plaintiff’s culbing and growing machinery in this village and taking into account the cost of purchasing the machinery and the depreciation cost of purchasing the machinery, and there is no need to culbing the machinery rather than purchasing the machinery. Accordingly, it is difficult to view that the Plaintiff was engaged in culbing the agricultural machinery in this case after the Plaintiff’s machinery was worn out and managed at the Plaintiff’s expense. In light of this, it is difficult to deem that the Plaintiff engaged in 1B farming and cul works.

(5) The farmland ledger is only the data prepared for the management of farmland and the efficient implementation of agricultural policies, and cannot be deemed to have the validity of certifying self-defense, and there are considerable cases where the farmland ledger is prepared formally for the reduction of and exemption from various taxes, and it is not sufficient for administrative agencies to examine such fact. As such, it is insufficient to recognize the Plaintiff’s self-defense solely on the farmland ledger.

(6) The purport of the former Restriction of Special Taxation Act that provides for reduction or exemption of capital gains tax on self-arable farmland is to prevent speculation on non-owned farmland and to prevent the reduction of rural population by reducing the tax burden so that a person directly engaged in agriculture may engage in agriculture for a long time, and to revitalize agriculture and rural communities. Therefore, it is reasonable to interpret that the farmland owner shall be excluded from capital gains tax reduction if he/she cultivates farmland only intermittently by cultivating farmland using another person’s labor, etc. while he/she mainly has occupation other than agriculture.

3. Conclusion

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