Jeonju District Court-2014-Gu Partnership-11 ( December 17, 2014)

Adjudication 2013 ore2966 ( October 07, 2013)

The disposition party that denies the reduction or exemption on its own for eight (8) years since there is no evidence that there is other income and direct cultivation.

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.

Gwangju High Court (former High Court) 2015Nu47 (No. 18, 2015)

aa

b Head of the Tax Office

Jeonju District Court 2014Guhap11 ( December 17, 2014)

2015.04.13

2015.05.18

The judgment of the first instance shall be revoked. The defendant's imposition of capital gains tax of KRW 13,689,633 against the plaintiff on April 9, 2013 shall be revoked.

1. Details of the disposition;

A. On September 29, 1992, the Plaintiff completed the registration of ownership transfer for reasons of sale on September 21, 1992 with respect to the graveyard 694 square meters (hereinafter “instant land”).

B. On April 25, 2012, the Plaintiff sold the instant land to Cc for KRW 120,00,000, and on August 31, 2012, on the part of the Defendant, on August 31, 2012, the Plaintiff filed a report on KRW 24,245,869 for special long-term holding deduction (the special long-term holding deduction of the portion of the instant land among the instant land, KRW 21,940,087, which was the special long-term holding deduction of the portion of the instant land, calculated by adding the income tax reduced or exempted to KRW 7,34,474, and KRW 413,10,00 calculated by adding the current status of the instant land to KRW 66,00 (hereinafter referred to as “the part of the instant land”), which is a cemetery, to the Defendant as farmland, for eight or more years.

C. On April 9, 2013, the Defendant excluded the reduction and exemption for self-employed land under Article 69 of the former Restriction of Special Taxation Act (amended by Act No. 11614, Jan. 1, 2013; hereinafter referred to as the "former Restriction of Special Taxation Act") on the ground that the Plaintiff operated 000 won as a private business chain around 1995. From 1996 to 2009, the Plaintiff worked for 00 automobile agencies and engaged in agriculture on a regular basis or did not cultivate directly by investing more than half of farming work. The Defendant excluded the reduction and exemption for self-employed land under Article 69 of the former Restriction of Special Taxation Act (amended by Act No. 11614, Jan. 1, 2013; hereinafter referred to as the "former Restriction of Special Taxation Act") on the land of this case, which was located within the scope of 7,685,941 won as stated in the Plaintiff's report, after deducting the special deduction rate of long-term possession from 30.16.

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] Facts without dispute, Gap 1 through 4, 14, 17 evidence, Eul 1 and 2 evidence (which include numbers; hereinafter the same shall apply) 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 capital gains tax reduction and exemption provisions

Since the Plaintiff, from April 25, 2011 to April 25, 2012, who inherited the instant land from the Plaintiff’s father or father, sold the instant land from around 1971 to April 25, 2012, the Plaintiff has to be fully exempted from capital gains tax pursuant to Article 69 of the former Restriction of Special Taxation Act 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 “former Enforcement Decree of the Restriction of Special Taxation Act”).

2) Claim on the application of the special long-term holding deduction for the part of the instant land

As the Plaintiff owned for more than 10 years the portion of the instant land, the (B) Sub-Section 1 of the instant land, and the Plaintiff himself himself, the portion of the instant land falls under the category of the business land. Therefore, the Defendant shall apply the special long-term holding deduction on the portion of the instant land pursuant to Article 95 of

(b) Related statutes;

Attached Form 1 is as specified in the relevant Acts and subordinate statutes.

C. Determination

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

A) Interpretation of capital gains tax reduction provisions under the Restriction of Special Taxation Act

Article 69 (1) of the Restriction of Special Taxation Act prior to the amendment by the Enforcement Decree of February 9, 2006 provides that the tax amount equivalent to 100/100 of the transfer income tax shall be reduced on the income accruing from the transfer of land prescribed by the Presidential Decree among the land which is subject to agricultural income tax, which is directly cultivated by the residents residing in the location of such land for not less than eight years as prescribed by the Presidential Decree, and the same Act and its Enforcement Decree do not separately provide for the concept of "direct cultivation" or "self-arable", which is the requirement for the said reduction

Article 66 (12) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 19329 of Feb. 9, 2006) (amended by Presidential Decree No. 19329 of Feb. 9, 2006) provides that "Direct farming" means that a resident is engaged in the cultivation of agricultural products or the growing of perennial plants on his own land or is engaged in the cultivation of or the growing or growing of perennial plants with his own labor (However, Article 69 (13) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 2009 of Feb. 4, 2009).

The Supreme Court of Korea interpreted that the meaning of "direct cultivation" or "self-cultivation" before the enactment of the above enforcement decree includes not only cases where a transferor cultivates water by hand but also cases where a transferor hires another person under his responsibility and calculation, or causes a family member living or living together in the same household to cultivate it (see, e.g., Supreme Court Decisions 92Nu4642, Oct. 9, 1992; 2003Du2465, May 30, 2003; 94Nu996, Oct. 21, 1994).

However, the term "direct cultivation" of the Enforcement Decree newly established as above means that a resident engages in cultivating or cultivating crops or perennial plants on his own farmland at a certain time or by cultivating or cultivating more than a half of them with his own labor. The meaning of the new provision is clearly defined. According to the interpretation of the previous Supreme Court precedents, the purpose of legislation is to solve the problems such as reduction of capital gains tax without actually engaged in farming. It is necessary not only to impose tax requirements, but also to strictly interpret it in accordance with the law. Considering the fact that the tax laws and regulations should meet the requirements of non-taxation or tax reduction and exemption, it cannot be deemed that the meaning of the above "direct cultivation" includes cases where a resident makes another person or causes a person to cultivate or cultivate another person under his own responsibility and calculation as well as his family members living in the same household, and that a person who has been directly engaged in farming at least 20 percent of his own capital should be deemed to have been sentenced to 20 percent of his own capital and 20 percent of his own capital, regardless of whether he is directly engaged in farming.

B) the burden of proof

The legislative intent of the above provision is to reduce the tax burden following the transfer of farmland as part of the land farming policy and to make the owner. The burden of proof for such reduction requirements is against the Plaintiff who is a taxpayer claiming exemption of capital gains tax (see, e.g., Supreme Court Decision 2002Du7074, Nov. 22, 2002).

C) Determination

(1) According to the Plaintiff’s father’s acquisition of the instant land from around 1960 to around 1971, the Plaintiff directly cultivated the land for about 11 years. Since the Plaintiff’s succession to the instant land for about 1 year, it constitutes reduction or exemption from capital gains tax pursuant to Article 66(1) of the former Enforcement Decree of the Restriction of Special Taxation Act, the Plaintiff’s assertion that the instant land constitutes “A” under 14 and 17, and the Plaintiff’s title registration was made on June 18, 192 under the name of ee f and 19, and the ownership transfer registration was made on June 18, 192 under the name of 197, and there was no evidence to acknowledge that the Plaintiff continued to acquire the instant land from the Plaintiff’s heir for over 0 years on the grounds of sale on July 24, 1992, and there was no other evidence to acknowledge that the Plaintiff acquired the instant land from each of the instant 20-year co-owned witnesses’s succession.

(2) Following the plaintiff's assertion that he directly cultivated the land of this case since September 29, 192, it is difficult for the plaintiff to directly cultivate the land of this case. Thus, according to the following circumstances, ① the plaintiff was engaged in automobile sales in 00 automobile services from November 12, 1984 to December 31, 209, and the plaintiff was engaged in regular work. From 00,000,000,000 won to 10,000,000 won for agricultural land of this case, and it is hard to find that the plaintiff purchased the farmland of this case from 20,000 won to 10,000 won for agricultural land of this case. The plaintiff's 10,000 won to 20,000 won to 30,000 won to 10,000 won to 30,000 won to 10,000 won to 30,000 won to 19,00 won to 2.

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

A) Relevant legal principles

Article 95 (1) and (2) of the former Income Tax Act provides that "the special long-term holding deduction system" shall be excluded from those subject to the special long-term holding deduction. Therefore, in order to be subject to the special long-term holding deduction for the transfer of farmland, farmland shall be subject to the special long-term holding deduction for the transfer income tax, and 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, where farmland for which the holding period is not less than 5 years is transferred, farmland shall be subject to the special long-term holding deduction for the transfer income tax, which shall be subject to the special long-term holding deduction for the transfer income tax, and Article 95 (1) and (2) of the former Income Tax Act shall be subject to the special long-term holding deduction for the transfer income tax, and Article 95-3 (1) and (3) of the former Income Tax Act shall be subject to the special long-term holding deduction for the transfer income tax for the farmland for which has been transferred for over 5 years.

B) Determination

In light of the overall circumstances as seen earlier, it is insufficient to recognize that the Plaintiff: (a) either 19 to 24, 28, 31, and 32 evidence; and (b) the testimony of each statement of evidence No. 19 to 24, 28, 31, and 32 and each statement of witness of the party trial; (c) 3 years prior to the transfer date; (d) 2 years prior to the transfer date; (e) 3 years prior to the transfer date; or (e) 80% or more during the retention period; or (e) 80% or more during the retention period; and (e) there is no other evidence to prove otherwise. Therefore, it is reasonable to deem that the portion of the instant land constitutes a non-business land under Article 104-3 (1) 1 (a) of the former Income Tax Act

On the other hand, the plaintiff argued that the requirements for self-reliance to become the land for business subject to the special long-term holding deduction under Article 95 of the former Income Tax Act have the burden of proof against the tax authority. However, the above judgment is the purport that the defendant, who is the tax authority, bears the burden of proof as to the requirements for non-business land subject to the transfer income tax pursuant to Article 104(1) of the former Income Tax Act. Thus, the issue is whether the portion of the land in this case should be subject to the special long-term holding deduction under Article 95 of the former Income Tax Act, and it cannot be applied to this case, which is not a problem with the middle of the transfer income tax. In consideration of the legislative intent of the special long-term holding deduction in this case, the plaintiff still bears the burden of proof as to the requirements for self-reliance to be subject to the special long-term holding deduction, and thus, the plaintiff

3. Conclusion

Therefore, the plaintiff's claim shall be dismissed as it is without merit, and the judgment of the court of first instance shall be just and it shall be dismissed as it is so decided as per Disposition.