Changwon District Court-2014-Gu Partnership-20078 ( April 20, 2014)

Whether or not the plaintiff has actually satisfyed for one year or more in the inheritance farmland of this case

As the details of purchase of manure, etc. by the Plaintiff appears to be below purchase volume in light of the cultivated area claimed by the Plaintiff, the farmland ledger stated only that the farmland of this case was self-fluence, so the above evidence alone is insufficient to recognize the Plaintiff’s assertion, and there is no other evidence to acknowledge it.

Article 69 of the Restriction of Special Taxation Act

(C)The revocation of the disposition imposing capital gains tax

O KimO

O Head of tax office

Changwon District Court Decision 2014Guhap20078 Decided May 20, 2014

March 20, 2015

April 17, 2015

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance court is revoked. The Defendant’s disposition of imposition of KRW 139,978,980 on May 10, 2013 against the Plaintiff on May 10, 2013 (including additional taxes) was revoked (the Plaintiff stated in the complaint that “the disposition of imposition of KRW 139,978,980 for capital gains tax belonging to the year 2012” but it is obvious that the Plaintiff included the penalty tax in the above disposition of imposition was included in the record, and thus,

1. Details of the disposition;

A. On August 20, 2012, the Plaintiff: (a) sold BB 335-14 square meters, 335-14 square meters, 335-15 square meters, 562 square meters, 352-1 square meters, 352-1 square meters, 365 square meters, 365 square meters, 228 square meters, 366 square meters, 366 square meters, 368 square meters, 369 square meters, 520,00 won, 520,000 square meters, and 369 square meters, 520,000 square meters, total of 368 square meters, 549 square meters, to A; and (b) completed the registration of ownership transfer to AA on October 10, 2012.

B. On October 31, 2012, the Plaintiff: (a) filed a preliminary return on capital gains tax following the transfer of the farmland in this case; and (b) the farmland in this case was before the former Restriction of Special Taxation Act (amended by Act No. 11614, Jan. 1, 2013);

hereinafter the same shall apply) filed an application for reduction or exemption of capital gains tax on the ground that it constitutes self-farmland for at least eight years prescribed in Article 69(1).

C. However, on April 2013, the Defendant imposed and notified the Plaintiff on May 10, 2013, on the ground that the Plaintiff did not reside in the farmland of this case and did not meet the self-sufficiency requirements for at least eight years as prescribed by Article 69(1) of the former Restriction of Special Taxation Act (hereinafter “instant disposition”). On May 10, 2013, the Defendant imposed and notified the Plaintiff of the total final tax amount of KRW 139,978,978,980 calculated by subtracting the total of KRW 140,04,793,688 won + KRW 5,263 won from the total of KRW 134,79,63,263 won from the total of KRW 5,254,263 and the additional tax amount for unfaithful payment (hereinafter “instant disposition”).

D. The Plaintiff appealed and filed an appeal with the Tax Tribunal on July 26, 2013, but the Tax Tribunal dismissed the appeal on October 23, 2013.

Facts having no dispute over recognition, Gap evidence 1, 2, 3, Gap evidence 4, and 5, Gap evidence 1 through 7, Gap evidence 6, 7, Eul evidence 1, 2, and 5, and the purport of the whole pleadings.

2. Determination on the legitimacy of the instant disposition

A. The plaintiff's assertion

1) Since the 1960s, CCC, its father, was a farmer in the farmland in this case, and Won

Gohap acquired the farmland of this case by inheritance through consultation and division on December 5, 2007. The plaintiff acquired the farmland of this case by inheritance.

On December 31, 2007, when the resident registration place was moved to BB1-Do 5-5 on December 31, 2007, the Plaintiff resided directly in the farmland of this case until it sold the farmland of this case. Therefore, since CCC, the decedent, acquired and cultivated the farmland of this case pursuant to Article 66(11) of the former Enforcement Decree of the Restriction of Special Taxation Act for not less than eight years, the Plaintiff did not apply the said provision to the requirements for reduction and exemption of capital gains tax under Article 69(1) of the former Restriction of Special Taxation Act.

2) In addition, the Defendant’s farmland under Article 69 of the former Restriction of Special Taxation Act and Article 66 of the Enforcement Decree of the same Act

In interpreting and applying the requirements for residence and self-reliance, the requirements for self-reliance and residence were interpreted on the basis of traditional agricultural methods without considering the purport of statutes, the level of modern agricultural technology and transportation development, etc. In such a case, the failure to interpret the place of residence as an area substantially able to cultivate and demand for work only for agriculture is against the principle of equity in comparison with the transferor of the inherited farmland within three years from the date of inheritance without cultivating the inherited farmland.

3) Therefore, the instant disposition should be revoked in an unlawful manner.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Determination on the first argument

A) Burden of proof

Transfer by residing in a location of farmland as a requirement for reduction or exemption of transfer income tax on self-arable farmland;

The burden of proof on one’s own land for not less than eight years lies on a taxpayer who asserts a tax exemption of capital gains tax (see, e.g., Supreme Court Decision 2002Du7074, Nov. 22, 2002).

According to Gap evidence Nos. 5-1 through 7, CCC, its father, 1980.

6. On December 5, 2007, the Plaintiff completed registration of preservation of ownership of the farmland of this case, and the Plaintiff may recognize the fact that the farmland of this case was inherited from the above CCC on December 5, 2007. Article 66(11) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 24368, Feb. 15, 2013; hereinafter the same) provides that “where the inheritor has resided in the seat of farmland and continuously cultivated the inherited farmland for not less than one year, the period acquired and cultivated by the decedent shall be deemed the period cultivated by the heir.” However, the Plaintiff asserts that the heir continuously resided in the seat of the farmland of this case for not less than one year until the time of transfer after the succession and continuously

B) Whether the Plaintiff resided in the farmland of this case

(1) According to the statements in Gap evidence Nos. 8-1, 2, 3, and 14, the plaintiff of this case

The fact that the farmland of this case was transferred to BB1-5, 5-5, and the plaintiff's children had resident registration at the time of residence can be recognized as an area located within the macro-si where the farmland of this case is located. However, the above fact of recognition alone is insufficient to recognize that the plaintiff had resident registration at the above place of resident registration, and there is no other evidence to acknowledge it otherwise.

Rather, comprehensively taking account of the overall purport of the pleadings in the statements No. 8-1, No. 14, No. 3, No. 4, and No. 5, the Plaintiff resided with his resident registration on January 29, 2007 at the EE 78-4 of the window of Changwon-si, Changwon-si, and succeeded to the farmland of this case on December 31, 2007.

길 5-5로 주민등록을 이전하였는데, 원고의 배우자는 그 후에도 위 EEE에 주소를그대로 두고 있는 사실, 원고는 2008년부터 이 사건 농지 양도일까지 경남 함양군 소재 덕유교육원, 창원시 소재 QQQ교육청과 WWW도서관, 경남 고성군 소재 QQQ교육종합복지관 등에서 근무한 사실, 원고가 전입한 주민등록지에는 원고 아버지가 사망하기 약 5년 전부터 원고 아버지를 부양한 할머니(원고는 아버지와 사실혼 관계에있는 사람이라고 주장한다)가 살고 있는 사실을 인정할 수 있다.

According to the above facts, the plaintiff only transferred the resident registration to 5-5, BB1-ro, B, 5-5, and actually resided at the window of Changwon-si, Changwon-si, which is the immediately preceding resident registration place, as a living ground. Thus, it is difficult to deem that the plaintiff resided in the farmland of this case.

(2) Next, even if the original city is considered as the Plaintiff’s residence, the original city constitutes a “area within a Si/Gun/Gu adjacent to the area within a Si/Gun/Gu where farmland is located” under Article 66(1)2 of the former Enforcement Decree of the Restriction of Special Taxation Act, as an area adjacent to the present city which is the location of the farmland of this case.

The "Si/Gun/Gu adjacent to the above Enforcement Decree" refers to Si/Gun/Gu adjacent to each other with the same boundary line under the administrative district. The boundary line here includes cases adjacent to the sea. If Article 66 (4) and (11) of the former Enforcement Decree of the Restriction of Special Taxation Act is applied at the time of the commencement of the inheritance, even if a person who has resided in the above area for not less than one year during the period from the commencement of the inheritance to the date of the commencement of the inheritance does not reside in the area provided for in Article 66 (1) of the above Enforcement Decree, it is reasonable to view that the person who has resided in the above area meets the residential requirements of the aggregate farming period (the aggregate of the cultivation period cultivated by the heir and the decedent) as stipulated in Article 66 (11) of the above Enforcement Decree. However, in full view of the entries and arguments in Articles 20 and 21 of the above Enforcement Decree and the purport of the whole arguments, the plaintiff's allegation that the land in this case was integrated into Chang Si/Gu and its original city was located within the city.

C) Whether the Plaintiff directly cultivated the farmland of this case

(1) Article 66(13) of the former Enforcement Decree of the Restriction of Special Taxation Act provides, “The direct cultivation in the manner prescribed by Presidential Decree” means that a resident is engaged in cultivating crops or growing perennial plants on his/her own farmland or growing or growing them with his/her own labor at least half of farming work.” Meanwhile, the fact that the transferred land has been used as farmland for at least eight years is recognized, and this does not mean that the transferor is minor (see, e.g., Supreme Court Decision 94Nu996, Oct. 21, 1994); provided that a person engaged in direct farming is concurrently engaged in another occupation, even if the person is concurrently engaged in another occupation, it falls under a self-employed farmer, but it cannot be deemed as a self-employed farmer if it is an indirect operation of agriculture in view of other occupation (see, e.g., Supreme Court Decision 98Du9261, Sept. 22, 198).

(2) As shown in the Plaintiff’s assertion, each entry of Gap evidence Nos. 13, 15, and Eul evidence Nos. 13, 15, and Eul evidence Nos. 7 is RR, and the content and preparation method of the entry, the relationship between the originator and the Plaintiff, and the purport of the entire pleading in the entry of evidence Nos. 6. In other words, at the time of the Defendant’s on-site investigation into the transfer of the farmland of this case, TT, which is the head of the above BB village, was signed in the form of a written confirmation of the cultivation of the farmland of this case without any content at the Plaintiff’s request. In light of the fact that the Plaintiff was residing in a remote place between the farmland of this case and mountain, and that the Plaintiff did not directly cultivate the farmland of this case, and that it was inside the village resident.”

Each entry of Gap evidence 11-1 through 5 (the sales collection by each trader's goods) shows that the plaintiff purchased retirement expenses, etc. from 2008 to 2012 is less than the purchase volume in light of the cultivated area claimed by the plaintiff. The entry of Gap evidence No. 12 ( farmland ledger) is limited to the plaintiff's own farmland of this case without specific mentioning the time and method of the plaintiff's self-defense, and the above evidence alone is insufficient to recognize the plaintiff's assertion, and there is no other evidence to prove otherwise.

Rather, in full view of the facts stated in Eul evidence Nos. 4, 5, and 8 and the fact-finding on the DNA pages of this Court, the plaintiff served as a public official in Gyeongnam-gun, Changwon-si, Gosung-gun, etc. from 2008 to 2012, and the plaintiff is rice farming from 2008 to 2012.

Recognizing that there was no death, the government office filed a request for withdrawal of subsidies for preserving rice income with the government office around 2008, and the government office may recognize the fact that there was no single request for withdrawal of subsidies for preserving rice income.

(이에 대하여 원고는 공무원 등의 쌀직불금 부당수령이 사회문제가 되자 괜한 오해를살까 염려되어 면사무소에 쌀소득보전직불금 지급대상자 철회 요청서를 제출하였다고주장하나, 만약 원고가 직접 벼농사를 지었다면 부당수령을 우려하여 위와 같은 서류를 제출할 이유가 있었다고 보기 어렵다).

(3) Therefore, it is difficult to view that the Plaintiff cultivated the farmland of this case using one half or more of the farming work with its own labor by using the weekends and holidays, as alleged by the Plaintiff, while performing public official’s duties, on the basis that the instant farmland and the creative city with a distance of not less than 100km away from the instant farmland.

D) Sub-committee

Therefore, the disposition of this case, which the Plaintiff deemed to have failed to meet the requirements for self-sufficiency reduction and exemption for not less than eight years with respect to the farmland of this case, is legitimate, and therefore, the Plaintiff’s assertion

2) Judgment on the second argument

A) Under the principle of no taxation without law, the interpretation of tax laws and regulations shall be interpreted in accordance with the text of the law, barring any special circumstance, and shall not be extensively interpreted or analogically interpreted without reasonable cause. In particular, it accords with the principle of fair taxation to strictly interpret the provisions that clearly indicate preferential provisions among the requirements for reduction and exemption (see, e.g., Supreme Court Decision 2008Du11372, Aug. 20, 2009).

As seen earlier, the Defendant interpreted Article 69 of the former Restriction of Special Taxation Act and Article 66 of the Enforcement Decree of the same Act with respect to the transfer of the farmland of this case, and legally issued the disposition of this case.

B) Then, we examine whether the provisions of Article 69 of the former Restriction of Special Taxation Act and Article 66 of the Enforcement Decree of the same Act, which served as the basis for the defendant's disposition of this case, infringe on the

In this paper, I will see that capital gains tax reduction or exemption for self-arable farmland under Article 69(1) of the former Restriction of Special Taxation Act.

The provision grants exemption from the transfer income tax to be imposed on the income accrued from the transfer of one’s own farmland for not less than eight years. Its purport is to prevent the reduction of rural population and to support policies to foster agriculture by allowing the person engaged in agriculture to engage in agriculture for a long time. Therefore, the above provision does not infringe upon the rights of the parties or impose new obligations on the parties, and in light of the legislative purport, character, and content of the above provision, it cannot be deemed that the Plaintiff is subject to restriction on the freedom of residence or freedom of choice of occupation under the Constitution due to the above provision.

C) Next, we examine the Plaintiff’s assertion that the Defendant’s strict interpretation of Article 69 of the former Restriction of Special Taxation Act and Article 66 of the Enforcement Decree of the same Act, which did not recognize the reduction or exemption of capital gains tax on the Plaintiff who cultivated the inherited farmland, violates the principle of equity in comparison with the transfer of the inherited farmland within three years.

First of all, as seen earlier, the Plaintiff did not meet the requirements for self-sufficiency under Article 69 of the Restriction of Special Taxation Act and Article 66 of the Enforcement Decree of the same Act. In calculating the cultivation period, which is the requirements for reduction or exemption of capital gains tax on self-arable farmland, the problem arises that an inheritor who does not cultivate farmland is subject to reduction or exemption of capital gains tax due to adding up the cultivation period of the predecessor to the cultivation period of the farmland. To solve this problem, the Enforcement Decree of the former Restriction of Special Taxation Act provides that if an inheritor transfers farmland within 3 years after inheritance if he did not cultivate, the cultivation period of the decedent shall be added up (Article 66(12) of the former Enforcement Decree of the Restriction of Special Taxation Act). If an inheritor transfers farmland within 3 years after succession, the heir shall add up the cultivation period of the decedent only when he cultivates farmland for 1 or more years (Article 66(11) of the former Enforcement Decree of the same Act). In addition, the above provision aims to achieve the legislative purpose of the provision on reduction or exemption of capital gains tax on self-arable farmland.

C) Therefore, the Plaintiff’s assertion on this part is without merit.

3. Conclusion

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