Adjudication 2013 ore2966 ( October 07, 2013)

Since other income and direct cultivation cannot be deemed to have been made, a disposition party with reduction or exemption in the year of 8 years.

The burden of proof for self-defense is against the plaintiff, but it cannot be deemed that there are other income and 1/2 or more of the farming work have been cultivated with his own labor, so the original disposition denying reduction or exemption for not less than 8 years.

Article 94 of the Income Tax Act: Reduction or exemption of transfer income tax for self-Cultivating farmland under Article 69 of the Restriction of Special Taxation Act.

Jeonju District Court 2014Guhap11

AA

BB Director of the Tax Office

November 26, 2014

December 17, 2014

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 13,689,633 against the Plaintiff on April 9, 2013 is revoked.

1. Details of the disposition;

A. On September 29, 1992, the Plaintiff completed the registration of ownership transfer based on sale on September 21, 1992 with respect to OO-Myeon O-si 003 Graveyard 694 square meters (hereinafter “instant land”).

B. On April 25, 2012, the Plaintiff sold the instant land to CCC in KRW 00,000,000, and on August 31, 2012, the Plaintiff sold the instant land to the Defendant, on August 31, 2012, less the remainder 628 square meters (hereinafter referred to as “the portion of the instant land”) excluding the 6628 square meters (hereinafter referred to as “the part of the instant land”).

In fact, the Plaintiff filed a report on capital gains tax of KRW 413,210,00 calculated by applying the special long-term holding deduction, 245,869 (the special long-term holding deduction, special long-term holding deduction, 2,305,782 won among the instant land, and special long-term holding deduction, 21,940,087 won among the instant land), and the reduced or exempted capital gains tax for self-arable farmland as KRW 7,34,477.

C. On April 9, 2013, the Defendant, on the ground that the Plaintiff operated the Doddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddd

D. On June 13, 2013, the Plaintiff filed an appeal with the Tax Tribunal. On October 7, 2013, the Tax Tribunal dismissed the Plaintiff’s claim.

[Ground of recognition] Unsatisfy, Gap evidence Nos. 1 through 28

(B) the statements and images of evidence Nos. (1) and (2) and the purport of the whole pleadings;

2. Determination on the legitimacy of the instant disposition

A. Summary of the plaintiff's assertion

1) Claim on the application of the capital gains tax reduction and exemption provisions of the instant land

Since the Plaintiff: (a) around 8 years from April 25, 2012, when he inherited the instant land from the Plaintiff’s father or father to April 25, 2012, when he sold the instant land, the Plaintiff was subject to full reduction or exemption of capital gains tax pursuant to Article 69 of the former Restriction of Special Taxation Act (amended by Act No. 11614, Jan. 1, 2013; hereinafter the same) and Article 66 of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 24271, Dec. 28, 2012; hereinafter the same), the Defendant did not apply the said reduction or exemption provisions.

2) Claim on the application of the special long-term holding deduction to B of the instant land

Since the Plaintiff owned the part of the instant land for more than 10 years, and the Plaintiff himself himself, the part of the instant land constitutes the land for business. Therefore, the special deduction for long-term holding is applied pursuant to Article 95 of the former Income Tax Act, but the Defendant did not apply the said mutual deduction provision.

B. Relevant statutes

Attached Form 1 is as shown in attached Table 1.

C. Determination

1) Determination as to whether the capital gains tax reduction or exemption provision of the instant land applies

A) Relevant legal principles

(1) The meaning of direct cultivation

Article 69(1) of the former Special Act on the Restriction of Special Taxation provides that the tax amount equivalent to 100/100 of 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 the farmland for not less than eight years, and Article 66(1) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by the Presidential Decree No. 20620 of Feb. 22, 2008) provides that the resident residing in the location of the farmland under the main sentence of Article 69(1) of the former Enforcement Decree of the Restriction of Special Taxation Act refers to the person who has cultivated while residing in the Si/Gun/Gu where the farmland is located or in the area adjacent to the Si/Gun/Gu where the farmland is located for not less than eight years, and Article 69(12) of the same Act provides that the resident is constantly engaged in the cultivation of crops or the perennial of perennial plants by his own labor.

The term "direct cultivation" under each of the above provisions means that a resident is engaged in cultivating or growing crops or perennial plants on his own land or cultivating or growing them with his own labor, and its meaning is clearly defined. According to the interpretation of the previous Supreme Court precedents, the purpose of the new provision is to solve the problem such as reduction or exemption of capital gains tax without actually engaged in farming, and the tax laws and regulations must strictly interpret the requirements for non-taxation or reduction or exemption, as well as the legal provisions, it cannot be deemed that the above own labor force includes cases where a resident employs another person under his own responsibility calculation or causes a person to grow or cultivate his family members who live in the same household, as in the previous precedents (see, e.g., Seoul High Court Decisions 2009Nu15361, Apr. 14, 2010; 2009Nu1361361, Feb. 13, 2015; 2010Du163615, Feb. 16, 2010).

Therefore, the direct cultivation of farmland equivalent to the reduction of capital gains tax shall be deemed to have been directly cultivated regardless of the ratio of the person's own labor for a person engaged in agriculture. However, it is reasonable to determine that a person engaged in agriculture is directly cultivated only when the ratio of his/her own labor, excluding his/her family members, etc., during the whole farming work, is 1/2 or more.

(2) Burden of proof

Even if the fact that land has been cultivated as farmland is recognized, it is not presumed that the owner of the land does not have to have any own knowledge, and the fact that the land has been cultivated as farmland ought to be proved by the transferor who asserts such fact (see Supreme Court Decision 92Nu11893, Jul. 13, 1993).

B) Determination

In the instant case, there is no dispute between the parties that the Plaintiff satisfied the resident requirements of the capital gains tax reduction and exemption regulations, and thus, we examine whether the Plaintiff cultivated or cultivated not less than 1/2 of the land of this case with his own labor for not less than 8 years, i.e., whether

First, as to whether the Plaintiff directly cultivated the land of this case before September 29, 192, the health care center, the Plaintiff’s grandparents or parents cultivated the land of this case directly from around 1960 to around 1960, and the Plaintiff alleged that the Plaintiff inherited the land of this case. However, if a change in real rights is registered, it is presumed that the registration passed through lawful procedures and there was a change in real rights as to the registered contents (see Supreme Court Decision 62Da630, Dec. 27, 1962). According to the evidence No. 14-1 and No. 14-2, the Plaintiff’s assertion that the land of this case was purchased by the FF and 19 other than the 19 others on June 18, 1992, the Plaintiff’s assertion that the Plaintiff purchased the land of this case for sale on June 18, 1992 is not sufficient to recognize the ownership transfer registration under the Plaintiff’s name or the H’s transfer registration under the title No. 294, each of H.

Next, as to whether the Plaintiff purchased the instant land on or after September 29, 192, the following circumstances acknowledged by health care expenses and evidence as follows, namely, the Plaintiff generated a certain amount of income each year from 1984 to 2009, as stated in attached Table 2, and the Plaintiff was engaged in regular work in EE vehicle services during the entire period of possession of the instant land. The Plaintiff generated income of KRW 29,932,65 on 191, prior to the acquisition of the instant land. The Plaintiff’s acquisition of the instant land was 32,176, 117, 193, and 32,519,078, which was 200 before the acquisition of the instant land, from 193 to 200, it is difficult to recognize that the Plaintiff purchased the instant land by 1/32,000 to 1/2,000 before the acquisition of the instant land, and that the Plaintiff did not directly purchase the instant farming machinery and materials or 2/3-year receipts.

2) Determination as to whether the special deduction for long-term holding of part of the instant land is applied

A) Relevant legal principles

Article 95(1) and (2) of the former Income Tax Act provides that the special deduction system for long-term holding of land under Article 104-3 of the former Income Tax Act shall be excluded from those subject to the special deduction for long-term holding. Therefore, in order to be subject to the special deduction for long-term holding of land, farmland shall be subject to the special deduction for long-term holding. According to Article 104-3(1)1(a) of the former Income Tax Act and Article 168-6(1) of the former Enforcement Decree of the Income Tax Act, in cases where farmland, which has been held for five years or more, is transferred as in this case, to be subject to the special deduction for long-term holding, a person who has obtained special deduction for long-term holding of land for business, which has the nature of nominal income due to price increase, shall be subject to the special deduction for long-term holding, and a person who has been holding for at least three years or has resided for at least three years immediately before the date of such transfer, and a person who has been holding for at least three years or more than three years immediately before the date.

B) Determination

In light of all the circumstances as seen earlier, it is not sufficient to recognize that the entries in Gap evidence Nos. 22 through 24 alone with the self-defense for at least three years immediately before the transfer date, for at least two years immediately before the transfer date, for at least two years, or for 80 percent during the retention period, and there is no other evidence to acknowledge otherwise. Therefore, it is reasonable to view that the part of the land in this case falls under the non-business land under Article 104-3 (1) 1 (a) of the former Income Tax Act, and thus, it is not subject to the special long-term holding deduction under Article 95 (2) of the former Income Tax Act. Ultimately, the plaintiff's assertion on this part

3) Sub-decisions

Therefore, the instant disposition that imposes capital gains tax on the transfer of the instant land without applying the provision of capital gains tax reduction and exemption and the provision of special deduction for long-term holding.

3. Conclusion

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