Cho High 201 Jeon 1938 (Law No. 105, 2011)

It is difficult to recognize the transferred land as being of gross importance for not less than eight years.

It seems that the main occupation of an insurance company after the acquisition of land was the employee of the insurance company, and the main occupation of a rice farmer was the employee of the insurance company, and it seems that the work of a rice farmer is done by using machinery, but most of the mechanical works were done by others, so it is difficult to view that one-half or more of the agricultural works

Article 69 of the Restriction of Special Taxation Act

2011 Gohap4123 Revocation of disposition, etc. of imposition of capital gains tax

XX Kim

The Director of the National Tax Service

May 30, 2012

July 11, 2012

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of KRW 000 capital gains tax on January 1, 201 and KRW 000 capital gains tax on February 17, 2011 against the Plaintiff shall be revoked.

1. Details of the disposition;

A. On September 5, 1994, the Plaintiff acquired 00-1 Do-nam-dong 000-1 Do-dong 002 Do-dong and 000-5 Do-dong 1,003 m2 (hereinafter “instant land”). On March 16, 2010, the Plaintiff received compensation of KRW 000 for the following reasons: (a) the Plaintiff transferred the instant land upon receiving compensation for the acquisition of public land at the time of Yananananan-si.

B. On April 6, 2010, the Plaintiff filed an application for reduction or exemption of capital gains tax pursuant to Article 69 of the former Restriction of Special Taxation Act (amended by Act No. 10406, Dec. 27, 2010; hereinafter “Special Taxation Act”) on the ground that the instant land constitutes farmland with a self-fluence for at least eight years when filing a preliminary return on capital gains tax with the Defendant.

C. The Defendant determined that it is difficult to view the Plaintiff’s land as being self-employed for not less than eight years and applied the reduction and exemption provisions under Article 69 of the Restriction of Special Taxation Act, instead of applying the reduction and exemption provisions on the transfer of land for public business under Article 77 of the Restriction of Special Taxation Act, and imposed an imposition of KRW 000 on the Plaintiff on January 1, 201 and KRW 000 for special rural development tax on February 17, 201 (hereinafter “instant imposition disposition”).

D. The Plaintiff filed an appeal with the Tax Tribunal on April 27, 2011, but the Tax Tribunal dismissed the appeal on July 5, 201.

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

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

While the Plaintiff had worked for the Y insurance company (hereinafter “Y insurance”), there was no difficulty in self-sufficiency of the instant land since the Plaintiff worked for the Accident Compensation Team and was out of 100%. From around 2000, the father KimA was in a state that it was impossible for the Plaintiff to refrain from farming due to disease. The reason that the Plaintiff received the instant land through the father KimA without directly receiving the subsidies for rice production companies in 2008 is that the Plaintiff applied for the instant land jointly with the land owned by the KimA. Accordingly, the instant disposition based on the premise that the Plaintiff did not own the instant land was unlawful.

B. Relevant statutes

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

C. Determination

1) The main content and principle of interpretation of the statute

Article 69 (1) of the Restriction of Special Taxation Act provides that "the tax amount equivalent to 100/100 of the transfer income tax shall be reduced or exempted for the income accruing from the transfer of the land prescribed by the Presidential Decree among the land which is subject to the taxation of agricultural income tax, which is directly cultivated by the resident prescribed by the Presidential Decree residing in the location of such land for not less than eight years, and Article 68 (13) of the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 22583, Dec. 30, 2010) provides that "the direct cultivation" under Article 69 (1) of the Act means that the resident is engaged in cultivating or cultivating the crops or perennial plants on his own land at all times or in cultivating or cultivating them with his own labor."

In order to liquidate the tenant farming system, which is a major legal relationship and eliminate inefficiency of the use of farmland caused by absence, the above provision aims to promote agriculture and rural communities by preventing the speculation of farmland by out-of-the-spots and reducing the tax burden of self-employed farmers for not less than eight years, based on Article 121(1) of the Constitution, which declares the principle of light-to-land freedom as a duty of the State.

In light of the principle of no taxation without law, or the requirements for tax exemption or tax exemption, and the interpretation of tax laws is to be interpreted in accordance with the text of the law, barring any special circumstance, and it is not allowed to expand or analogically interpret without any reasonable reason, and in particular, it is also consistent with the principle of fair taxation to strictly interpret the provisions that can be viewed as the provision of preferential treatment among the requirements for reduction and exemption (see Supreme Court Decision 97Nu20090, Mar. 27, 1998). In light of the contents and legislative purpose of the aforementioned provision of the Restriction of Special Taxation Act and the Enforcement Decree thereof, in order to recognize that a resident "direct farming" was "direct farming of farmland," there is a need for a direct input of 1/2 or more of the farmland with a farmer or a farmer's own direct labor force. Accordingly, the farmland owner should be excluded from the reduction and exemption of capital gains tax if he cultivates a third person with an occupation other than agriculture and cultivates the farmland on a intermittent basis.

2) Determination as to whether the Plaintiff directly cultivated the instant land

First, there is no dispute between the parties that the Plaintiff had worked as Y insurance staff during the possession of the instant land, and thus, it is difficult to deem that the Plaintiff had been engaged in the cultivation of crops on the instant land.

Next, in light of the following circumstances, it is difficult to recognize that the Plaintiff cultivated more than 1/2 of the farming work on the land in this case with its own labor, and in light of the following circumstances: (a) the Plaintiff’s father KimA from 200 to 6, and 8-1 to 4, as to whether the Plaintiff cultivated more than 1/2 of the farming work with its own labor; and (b) the Plaintiff’s father KimA from 2000 to 2, 3, 4-1 to 8, and 1/2 of the farming work on the land in this case with its own labor; and (c) there is no evidence to acknowledge otherwise.

A) After acquiring the instant land from January 1, 1995 to December 2009, the Plaintiff worked at the Y Insurance Daejeon Indemnity Team (YY Insurance Daejeon Indemnity Center), the Compensation Support Department (Seoul), the Seobuan Branch of the Seobuan Compensation Center, the west Coastal Business Office (Budget) and the Red Business Office (red) of the Chungcheong Branch, the Gyeonggi Southern Branch of the Middlebu Branch (red). The Plaintiff seems to have a limit to paying time for cultivating the instant land, even if the Plaintiff’s duties entrusted to the Plaintiff were able to be re-designated as compensation duties (written in the evidence No. 2), and there were many limitations to paying time for cultivating the instant land.

B) From 2002 to 2009, the Plaintiff’s benefits received from Y insurance was total of KRW 000, average annual salary of KRW 000, and the Plaintiff’s primary occupation appears to have been an employee from Y insurance.

C) On September 28, 2010, the head of Tong KimB at the Plaintiff’s domicile prepared a confirmation letter to the effect that “The land was cultivated by KimA from the mid-190s to the mid-2009, and the Plaintiff was going to go to the weekend.” On April 6, 2011, KimB prepared a confirmation letter to the effect that “the Plaintiff got to grow the land in question.” At this court, KimB stated to the effect that “the Plaintiff cultivated the land in this case,” but at this court, KimB kept another person, who used machinery such as Tex, etc., and managed the farming work, such as drinking water, and that the Plaintiff was also aware of the Plaintiff’s farmland in this case, and that the Plaintiff was also aware of the Plaintiff’s farmland in this case’s 2/2,000 square meters.”

D) In this paper, if a rice farmer is frighted in rice, the rice bed and frighting work consisting of most of the farming works, and the machinery owned by the Plaintiff is replaced by a machine. The machinery owned by the Plaintiff is merely a frighting machine and the remainder was engaged in the work to have a person holding the machine (the witness KimB’s testimony). Thus, even if the Plaintiff divided other works not required to be fright together with the Plaintiff’s father KimCC, it is difficult to view that the Plaintiff cultivated 1/2 or more of the farming work using his own labor force.

3) Therefore, the Plaintiff’s assertion premised on the Plaintiff’s direct cultivation of the instant land for eight years 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.