Land falling under the reduction or exemption of gift tax for farming children who are engaged in farming while serving as school personnel;

A farmer can not be deemed to fall under a farmer in a case where the farmer indirectly engages in the agriculture while emphasizing to another occupation. However, it is difficult to see that the plaintiff was a teacher and staff member, and the plaintiff argued that his father was replaced by the farming day due to the elderly age, it is reasonable to view that the donor did not engage in agriculture within 2 years retroactively.

Article 1 of the Restriction of Special Taxation Act

Article 15 of the Restriction of Special Taxation Act

1. The plaintiff's appeal is dismissed.

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

Revocation of the first instance judgment;

The Defendant revoked the disposition of imposition of KRW 104,705,132, which was rendered against the Plaintiff on July 5, 2006 (the Plaintiff sought revocation of the disposition of imposition of KRW 139,725,390, which belonged to the year 2005, but the claim was reduced in the first instance).

1. Details of the imposition;

A. On October 17, 2005, the Plaintiff received a donation of land on 13 lots, including nine parcels, including the total sum of 8,452 square meters of land (hereinafter “the instant farmland”), such as Pyeongtaek-si ○○○-dong 35-○ 907 square meters of land, from the Cho Jong-dong (hereinafter “the instant donation”).

B. On November 18, 2005, the Plaintiff’s father’s ○○ was applied for exemption of KRW 142,865,706 for gift tax on the farmland of this case on the ground that the Plaintiff is a farmer under Article 15(2) of the Addenda of the Restriction of Special Taxation Act (amended by Act No. 5584, Dec. 28, 1998); Article 58(1) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 5584, Dec. 28, 1998; hereinafter the same).

C. However, on July 15, 2006, the defendant decided that "the plaintiff did not have any own self-fluence of the farmland in this case as ○ University faculty members, and thus, the plaintiff did not meet the requirements of farming children under Article 58 (1) of the former Regulation of Tax Reduction and Exemption Act, Article 57 (2) and Article 57 (1) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 15976, Dec. 31, 198; hereinafter the same shall apply) and thus, it shall not be exempted from gift tax on the farmland in this case." The defendant imposed KRW 162,938,349 on the land in this case including the farmland in this case.

D. After that, the Defendant corrected the Plaintiff’s deductible amount from KRW 659,867 to KRW 14,946,437, and withdrawn the imposition of additional tax amount of KRW 14,286,576, which was initially imposed, thereby correcting the amount of gift tax to KRW 139,725,390, and notified the Plaintiff of the disposition of imposition of KRW 139,725,390, which was left after the correction of reduction (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 1-1-3, Gap evidence 2-1, 2-2, Gap evidence 4, Gap evidence 14, the purport of the whole pleadings

2. Whether the disposition of imposition is lawful.

A. The plaintiff's assertion

Although the Plaintiff’s work as ○○ University Scupner was true, since 191, the Plaintiff offered a contract to the owner of agricultural machinery, such as fryer, fryer, etc. with the Plaintiff from 191 to her year, and processed it, and directly cultivated the farmland of this case with the attachment, such as water air, pesticide spraying, and first aid using the attendance period, retirement period, weekend, and vacation period. Therefore, the Plaintiff constitutes a farming child under Article 57(1) of the Enforcement Decree of the former Enforcement Decree of the Regulation of Tax Reduction and Exemption Act, and thus, the gift tax on the farmland of this case should be exempted.

(b) Related statutes;

Article 1 of the Restriction of Special Taxation Act

Article 15 of the Restriction of Special Taxation Act

Article 58 of the former Regulation of Tax Reduction and Exemption Act

C. Determination

(1) Article 58(1) of the former Regulation of Tax Reduction and Exemption Act provides that where a farmer who is self-employed as prescribed by the Presidential Decree donates farmland, etc. falling under any of the following subparagraphs to his lineal descendants engaged in farming as prescribed by the Presidential Decree (hereinafter referred to as a "farmer") the gift tax shall be exempted on the value of such farmland, etc., and Article 57(1) of the Enforcement Decree of the same Act provides that with respect to "a farmer who is self-employed as prescribed by the Presidential Decree" under the main sentence of Article 58(1) of the former Regulation of Tax Reduction and Exemption Act as to "a farmer who is self-employed as prescribed by the Presidential Decree" is residing in the Si/Gun/Gu where such farmland, etc. is located or the Si/Gun/Gu adjacent thereto (Article 1) and a person who is directly engaged in farming for not less than two years retroactively from the date of donation of such farmland, etc. (Article 58(2) of the former Regulation of Tax Reduction and Exemption Act (Article 58(1) of the same Act) provides that a person who satisfies all the requirements

According to the above provisions, in order to be exempted from the gift tax due to the donation of farmland, etc. under the Regulation of Tax Reduction and Exemption Act, the donor must reside in the Si/Gun/Gu located in the relevant farmland, etc. or the Si/Gun/Gu adjacent thereto and engage directly in farming for not less than two years retroactively from the date of donation, and the donee shall also be a person who is not less than 19 years old as of the date of donation and is engaged directly in farming for not less than two years retroactively from the date of donation, who resides in the Si/Gun/Gu where the relevant farmland, etc.

In addition, the purpose of the above system is to exempt a farmer from the gift tax if the farmer's child continues to engage in farming by succeeding the self-employed farmer, while supporting the economic activities of the farmer on the premise that the farmer continues farming, and preserve the farmland which is the physical foundation of the farming. It is reasonable to interpret the tax law in accordance with the principle of no taxation without the law, or the principle of no taxation without the law, barring special circumstances (see, e.g., Supreme Court Decision 97Nu20090, Mar. 27, 1998). The term "person who is directly engaged in farming" in the above provision refers to a person who directly manages and cultivates the farmland, etc. under his/her own responsibility without entrusting or lending it to another person, and as long as he/she is directly engaged in farming, he/she shall be deemed to fall under the farmer's children, but if he/she is indirectly engaged in farming with the belief of other occupation (see, e.g., Supreme Court Decision 98Du271, Sept. 22, 1998).

(2) Therefore, as to whether the Plaintiff had been directly engaged in farming for 2 or more years retroactively from the donation date of this case, Gap evidence 4, Gap evidence 5-1 through 3, Gap evidence 9, Eul evidence 3-1 through 10, Eul evidence 7-1, 2, and Eul evidence 8, and the purport of the whole pleadings as to the testimony of this case's witness Lee ○○-gun, ○○○○○, ○○○○○○○○○, 60, 70, 195, 206, 30, 196, 30, 206, 30, 196, 406, 206, 30, 300, 60, 306, 196, 30, 196, 206, 30, 306, 196, 30, 300, 195, 200.

In light of the following circumstances, the Plaintiff, as ○ University’s faculty member, was gaining earned income of approximately KRW 70,000 through KRW 80,000,000 per year from the date of the donation of this case before and after the date of the donation of this case, and thus, it appears that there was no time for the Plaintiff to directly cultivate the farmland of this case on the ordinary day he should concentrate on his duties. There was no objective data such as documents related to the system shipment, etc. of agricultural products produced in the above land, for instance, there was no evidence to acknowledge that the Plaintiff had self-sufficientness in the farmland of this case. While the Plaintiff and the Plaintiff were members of the Songdong Agricultural Cooperative, from 201 to 207, the Plaintiff did not purchase fertilizers in the above agricultural industry of this case, from around 10 years before and after the date of donation of this case, and the Plaintiff could not have been indirectly engaged in farming business in the above agricultural industry of this case by taking account of the following circumstances: (a) the Plaintiff’s father’s father’s negligence, as the Plaintiff’s assertion, but could not meet the requirements of farmland of this case.

(3) Therefore, the Plaintiff cannot be deemed as a farming child under Article 58(1) of the former Regulation of Tax Reduction and Exemption Act and Article 56(2) and (1) of the former Enforcement Decree of the Regulation of Tax Reduction and Exemption Act. Accordingly, the Defendant’s disposition imposing gift tax on the Plaintiff is lawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.