early 209 Heavy3022 (2010.03.09)

The disposition imposing capital gains tax on the transfer of forest trees that is not business income is legitimate.

In order to constitute a growing business, the forest shall be continuously and repeatedly produced to the extent that it can pursue profit by cutting or transferring the forest. Since it is insufficient to recognize that the instant forest has been afforested to engage in growing business or that management activities of forest trees have been performed to engage in growing business, the disposition imposing tax on the transfer of forest trees by deeming it as capital gains is legitimate.

2010Guhap7605 Revocation of Disposition of Imposing capital gains tax

Doz.

O Head of tax office

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of capital gains tax of KRW 636,692,90 to the Plaintiff on February 10, 2009 shall be revoked.

1. Details of the disposition;

A. On June 2, 1987, the Plaintiff acquired 192-1 forest land of 192-1 forest land of 192,082 m2, 192-4 forest land of 192-2 forest land of 192-2 forest land of 1936 m2, and transferred 1,750,000,000 won to Nonparty E non-party 1 and non-party 1 land of 1,750,000,000 income from the transfer of the above forest land of 1,750,000,000 income from the transfer of the above forest land of 192-1 forest land of 2,000 m2,000,000 income from the transfer of the above forest of 2,00,000 won to the Plaintiff, and the Defendant did not consider the transfer income tax of 89,921,490 m2,008.

C. On July 30, 2009, the Plaintiff filed an appeal to revoke the instant disposition with the Tax Tribunal, but was dismissed on March 9, 2010.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 2, 4, 5, 7, Eul evidence Nos. 1 and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Article 29 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19890, Feb. 28, 2007) invokes the scope of business of the forest in order to produce forest trees as a type of the forest business among forestry, the Korean Standard Industrial Classification Table provides for growing, growing, and protecting the forest in order to produce the forest trees as one type of the forest business among the forestry, and Article 12 subparagraph 3-3 of the Income Tax Act (amended by Act No. 9897, Dec. 31, 2009) provides for growing or transferring the forest trees in the forest land, the afforestation period of which is not less than five years, among the business income from which the income from cutting or transferring the forest trees in the forest land, the amount of which does not exceed 6 million won per year shall be subject to non-taxation, on the premise that the business income from cutting or transferring the forest trees in the forest itself from which the plaintiff acquired the forest land in this case to acquire it or to transfer the forest trees in this case to another person without any taxation.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Article 19(1)1 of the Income Tax Act provides that income generated from forestry business is business income. In addition, the Korean Standard Industrial Classification Table invoked the scope of business under Article 29 of the Enforcement Decree of the Income Tax Act provides that the scope of forestry (020) shall be "Yyoung, industrial seeds and seedlings production, felling activities, wild forest products gathering and forestry-related services," and that the forest management business (021) among subdivided forestry shall be "the production, afforestation and cultivation of trees and seedlings for forest, forest conservation, wild trees and wild forest products gathering activities," and that the three classification of growing business (02012) is defined as "the business income from forests, tending, protecting, and protecting the industry." In full view of the aforementioned provisions, the method of calculating the amount of income from the growing business under the Income Tax Act shall be deemed as one of the business activities of the growing business under the Income Tax Act, and it shall be deemed that the forest is continuously and repeatedly transferred for profit-making purposes or independent forest activities, so it shall be deemed that the transfer of the amount of income from the growing business is reasonable.

Therefore, the part of the Plaintiff’s assertion that the deforestation or transfer of forest trees itself does not constitute forestry income is reasonable. Thus, the legitimacy of the Plaintiff’s assertion depends on whether the Plaintiff was engaged in growing activities as a project.

(2) According to Gap evidence Nos. 1, 3, and 10 (including the land number) and Gap evidence Nos. 6, each of which the plaintiff engaged in growing businesses, the following facts are stated in the afforestation ledger of 1973 and 1,500 occine trees in 1978, which was disclosed at the plaintiff's request, and the afforestation ledger of 1973 and 1978, which was entered in the afforestation ledger of each of the forest of this case, which was disclosed by WW market, as the afforestation of occine trees in 1973, and 1,500 occine trees in 1978; ② on the non-performance project ledger attached to each of the afforestation ledger of this case, the fact that the residents of this case were 975 kilograms and 900 kilograms of occine fertilizer in 1973 and the non-party Y from 1973 to 204 to 3, respectively, and the fact that the plaintiff received the afforestation of each of this case.

However, according to the purport of the Plaintiff’s 1, 2, and 4-1, 2, and 2’s statement and pleading, the Plaintiff’s public officials on the above afforestation ledger were afforested for education in WU Eup according to the 1978 National Treasury subsidies, and the Plaintiff’s 1,200 marries and 5-marries were also carried out in the above forest community without any inconsistency with the above 1,200ms statement on the fact that the Plaintiff was not in possession of the above forest land for the purpose of sale without any inconsistency with the above 1,20ms statement on the fact that the Plaintiff was not in possession of the forest land for the purpose of sale without any inconsistency with the above 1,50marries, and that the Plaintiff was not in possession of the forest land for the purpose of sale without any inconsistency with the above 1,000marries and 1, and that the Plaintiff was not in possession of the forest land for the purpose of this case’s 9marries and 204.

(3) Ultimately, the Plaintiff’s assertion is without merit.

3. Conclusion

Thus, the plaintiff's claim of this case is dismissed as it is without merit.