Cho-2017-China-1518 (2017.07)

The burden of proof of the direct cultivation of the land for not less than eight years lies in the location of the farmland and on the taxpayer claiming exemption of capital gains tax.

The burden of proving the fact that the transferred land was directly cultivated for not less than eight years while residing in the location of the farmland exists to the taxpayer who asserts exemption of capital gains tax under the relevant provision.

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

2018Guhap12621 Revocation of Disposition of Imposing capital gains tax

○ ○

○ Head of tax office

August 16, 2018

September 6, 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 disposition of imposition of capital gains tax of KRW 145,171,640 (including additional tax) for the Plaintiff on July 1, 2016 shall be revoked.

1. Details of the disposition;

A. On September 1, 2005, the Plaintiff acquired 1353 square meters in ○○○-dong, ○○○-dong, 1353 square meters in ○○-dong, and 1354 square meters in 1,714 square meters in ○○-dong, ○○-dong, and 1354 square meters in 1353 square meters in 1353 square meters in 1353, May 25, 2010, each of the above land was divided into 1353-1 square meters in 1353-1, and 1354-1, and 704 square meters in 1353 square meters in 1353 square meters in ○-dong, ○○-dong, ○○-dong, and 1354 square meters in 1,353 square meters in 135 square meters in 135,010 and divided into 1353 square meters in 136,13635 square meters in 136.

B. The Plaintiff sold the instant land to Yuok, October 1, 2015, and completed the registration of ownership transfer on the instant land on October 22, 2015.

C. On December 21, 2015, the Plaintiff reported the transfer income tax on the instant land to the Defendant by applying the provisions on reduction and exemption of transfer income tax on self-Cultivating farmland for at least eight years under Article 69(1) of the former Restriction of Special Taxation Act (amended by Act No. 13560, Dec. 15, 2015; hereinafter the same).

D. On July 1, 2016, the Defendant denied the application for reduction of self-owned farmland for the reason that the Plaintiff failed to meet the requirements for self-sufficiency for at least eight years at the time of transferring the instant land to ○○ok, and excluded the special long-term possession deduction on the ground that part of the instant land constitutes land for non-business use, and determined and notified the Plaintiff of KRW 145,171,640 (including additional tax) of the transfer income tax for the year 2015 (hereinafter “instant disposition”).

E. On March 10, 2017, the Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on March 10, 2017, but the appeal was dismissed on September 7, 2017.

[Ground of recognition] Facts without dispute, Gap evidence 1 through 6, Eul evidence 1 and 4 (including branch numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Since the Plaintiff continuously cultivated agricultural crops on the instant land for at least eight (8) years from October 22, 2015 on the commencement of bean planting of bean around March 2007 after the acquisition of the instant land, the transfer income tax on the instant land ought to be reduced or exempted pursuant to Article 69(1) of the former Restriction of Special Taxation Act. Nevertheless, the instant disposition made without denying the Plaintiff’s application for reduction or exemption of the transfer income tax on self-owned farmland for at least eight (8) years is 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 provides, “The tax amount equivalent to 100/100 of capital gains tax shall be reduced or exempted on the income accruing from the transfer of land prescribed by Presidential Decree, among land cultivated directly by a resident prescribed by Presidential Decree who resides in the seat of farmland for at least eight years by the method prescribed by Presidential Decree.” Article 66(13) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 26959, Feb. 5, 2016) provides, “The direct cultivation by the method prescribed by Presidential Decree” in the main sentence of Article 69(1) of the former Enforcement Decree of the Restriction of Special Taxation Act means that a resident is constantly engaged in the cultivation of crops or perennial plants in his/her own farmland or in the cultivation or cultivation of perennial plants with his

As above, the burden of proving the fact of direct cultivation of the transferred land for not less than eight years is imposed on a taxpayer who asserts exemption of capital gains tax pursuant to the relevant provision (see, e.g., Supreme Court Decision 94Nu996, Oct. 21, 1994).

2) In light of the following circumstances acknowledged by comprehensively taking account of the overall purport of the statements and arguments in Evidence Nos. 2, 5, 7 through 11, and Nos. 2, 3, 5, and 6 as to the instant case, it is insufficient to recognize that the evidence submitted by the Plaintiff alone was insufficient to recognize that the Plaintiff had been engaged in the cultivation of crops, etc. on the instant land continuously for at least eight years before October 22, 2007, or cultivated or cultivated not less than half of the farming work with his own labor, and there is no other evidence to acknowledge otherwise. Accordingly, the Plaintiff’s assertion is without merit.

(1) If a tax authority received a written confirmation from a taxpayer in the course of conducting a tax investigation, barring any special circumstance, such as that the written confirmation was forced against the will of the person who prepared the tax investigation, or that it is difficult to take the written confirmation as evidence to prove specific facts due to lack of details thereof, the evidence of the written confirmation cannot be readily denied (see, e.g., Supreme Court Decision 2001Du2560, Dec. 6, 2002

In the process of investigating the transfer income tax on the land of this case by the defendant, the plaintiff was unable to cultivate due to landscaping trees in April 26, 2016, and was signed on the door-to-door statement stating that "on the first ground without dry field, it was left left alone without being separately managed around April 2008." In this regard, the plaintiff did not planting landscaping trees on the land of this case, and started farming houses since 2007. The plaintiff asserted that the first day of the farming company which was long time when the investigation was conducted, and that the above statement was erroneously stated. However, the plaintiff denied the above statement.

○○○, a landscaper, stated that “the item column for the special terms and conditions of the sales contract, which was prepared at the time of purchase of the instant land, is owned by ○○○, and this rule is entitled to extract, bring in, and take out trees until December 31, 2017, and if transplant is not known until December 30, 207, it shall belong to the Plaintiff.” This rule stated that the public officials belonging to the Defendant did not transplant trees until December 31, 2007, and this item was reverted to the Plaintiff. This is consistent with the contents of the above statement, and it is difficult to believe that the Plaintiff’s assertion that the Plaintiff made a false statement with regard to the commencement date of the farming company in a situation where a tax investigation was conducted on the fulfillment of its own requirements for eight or more years is conducted, or that it is difficult to deem that the above statement was forced or its content was incomplete, it is difficult to reject the above content of the statement.

② In light of the airline margin of the instant land taken on April 2007 and May 2008, it is difficult to find out any scams that part of the instant land is planted, and most of the remainder are growing, and agricultural crops are growing or dry field was set up.

Third, the plaintiff submitted 00,000 won to the above 0-year mother of 00 on April 25, 2007, 200 to the above 100 won. However, the plaintiff's 20-year agricultural expense of 00-year agricultural expense of 00-year agricultural expense of 00-year agricultural expense of 00-year agricultural expense of 00-year agricultural expense of 00-year agricultural expense of 10-year agricultural expense of 00-year agricultural expense of 00-year agricultural expense of 00-year agricultural expense of 00-year agricultural expense of 00-year agricultural expense of 200-year agricultural expense of 10-year agricultural expense of 00-year agricultural expense of 00-year agricultural expense of 10-year agricultural expense of 2007 and 10-year agricultural expense of 00-year.

⑤ On August 29, 2005, the Plaintiff asserted that ○○ Livestock Cooperative was a quasi-member of the Plaintiff as a preparatory work for farming houses. However, according to Article 15 of the ○○ Livestock Cooperative’s Articles of Incorporation, quasi-member of the Plaintiff did not require self-reliance. Rather, the Plaintiff joined the ○○ Agricultural Cooperative as a member of the Plaintiff’s association around February 201, and the record of purchasing fertilizers, agricultural chemicals, etc. was also revealed from that time.

④ The Plaintiff, in 2007, knew that the Plaintiff was aware that it was speak in the instant land, and that it was good for the Plaintiff to speak speak speak speak speak speak speak speak speak speak speak spe speak speak speak speak speak speak speak speak speak speak speak speak speak spe speak spe spe spe speak spe speak spe spe spe spe spe spe spe spe spe spe spe.

3. Conclusion

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

Relevant statutes

director of the former Restriction of Special Taxation Act (amended by Act No. 13560, Dec. 15, 2015)

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

(1) With respect to income accruing from the transfer of land prescribed by Presidential Decree, which is directly cultivated by a resident prescribed by Presidential Decree, who resides in farmland for at least eight years [where such farmland eligible for subsidies for direct payments transfer prescribed by Presidential Decree is transferred no later than December 31, 2015 to the Korea Rural Community Corporation established under the Korea Rural Community Corporation and Farmland Management Fund Act or corporations prescribed by Presidential Decree which mainly engage in agriculture (hereafter in this Article, referred to as "agricultural corporations"), not less than three years] by the method prescribed by Presidential Decree, the tax amount equivalent to 100/100 of the capital gains tax shall be reduced or exempted: Provided, That where the relevant land is incorporated into a residential area, commercial area, or industrial area established under the National Land Planning and Utilization Act (hereafter in this Article, referred to as "residential area, etc.") or has been designated as a land other than farmland before a replotting disposition is taken, the amount of tax equivalent to 100/100 of the capital gains tax shall be reduced only on the income prescribed by Presidential Decree, which

(1) Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 26959, Feb. 5, 2016)

Article 66 (Reduction or Exemption of Transfer Income Tax for Self-Cultivating Farmland)

(13) "Direct cultivation in a manner prescribed by Presidential Decree" in the main sentence of Article 69 (1) of the Act means that a resident is engaged in cultivating crops or growing perennial plants on his/her own farmland at all times or is engaged in cultivating or growing at least half of farming works with his/her own labor.