Whether the lost trees are planted at the time of transfer and is subject to non-taxation by maintaining functions as farmland.

Where any land, other than farmland, is designated as a land scheduled for replotting before a replotting disposition, the farmland for which three years have elapsed from the date of such designation shall not fall under the self-arable farmland for not less than three years subject to

Article 89 (Non-Taxable Transfer Income Tax of the Gu)

Article 94 (Scope of Transfer Income Tax of the Gu)

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of capital gains tax of KRW 2,748,424,490 against the Plaintiff on January 31, 2007 shall be revoked.

1. Details of the disposition;

A. From around 1969 to 1979, the Plaintiff acquired and used 14 lots, other than 298 square meters prior to ○○○○-dong, Suwon-si, ○○○○○○-dong, and used them for the purpose of cultivating lost trees. Each of the above lands was designated as reserved land under the Urban Development Act on March 21, 1998.

B. On October 21, 2005, the Plaintiff transferred the above ○○○○○○-dong and the above 14 parcels, and filed a non-taxation report on capital gains tax due to farmland substitute land on the aggregate of 10 parcels, the land category of which was the previous and forest land, on the aggregate of 20,291 square meters (hereinafter “the instant land”). On December 26, 2005, on December 26, 2005, the Plaintiff acquired 16 parcels, other than 0 ○○○○-3,953 square meters, from ○○○-ri, ○○○○-ri, ○○○○-3,953 square meters, as substitute land.

C. On January 11, 2007, the Defendant issued a revised notice of capital gains tax of KRW 6,219,428,790 for the year 2005, on the ground that the transfer of the instant land by the Plaintiff was made more than three years after the date of the designation of the land scheduled for substitution, and excluded the application of non-taxation provisions, but on January 31, 2007, the Defendant corrected capital gains tax of KRW 2,748,424,490 to KRW 9,540,00 for the land scheduled for substitution, which is not 20,291 square meters for the land to be transferred to the Plaintiff.

D. On June 28, 2007, the Plaintiff raised an objection and filed a request for a national tax adjudication on June 28, 2007, but was dismissed on December 6, 2007 and filed the instant lawsuit on March 10, 2008.

[Reasons for Recognition] Facts without dispute, Gap 1 through 5 evidence, Eul 1, 2, 4, and 6 evidence, the purport of the whole pleadings

2. The assertion and judgment

A. The plaintiff's assertion

① The land to be excluded from non-taxable farmland should be limited to cases where the function of the land as farmland was already lost at the time of transfer. The instant land is still exempt from taxation because ○○ is planted at the time of transfer as farmland, thereby maintaining its function as farmland.

(2) Where a taxpayer has justifiable grounds for not transferring his/her farmland within three years from the date of designation of a land scheduled for replotting, the period for which such grounds exist shall be excluded from the application of the above three-year period.

(3) Article 89 subparagraph 4 of the Income Tax Act provides that "No capital gains tax shall be imposed on income accruing from substitute farmland for farmland falling under cases prescribed by the Presidential Decree." Thus, in order to provide exceptions to non-taxable farmland in the Enforcement Decree, the Income Tax Act does not have any provision related thereto, and therefore, Article 153 (4) 2 of the Enforcement Decree of the Income Tax Act is null and void.

(4) Article 153(4)2 of the Enforcement Decree of the Income Tax Act goes against the principle of proportionality or the principle of equality, even in cases where the relevant farmland is not transferred within three years from the date of designation if it satisfies the general requirements for non-taxation under Article 153(2) of the Enforcement Decree of the same Act, even if it does not transfer the relevant farmland within three years from the date of designation.

(5) If farmland is disposed of at 3 years from the date of designation of the land scheduled for substitution, the whole amount of the relevant farmland shall be exempted, and if the farmland is disposed of after the lapse of 3 years, it shall be exempted from the first acquisition date of the total capital gains for the portion formed within three years from the date of designation of the land scheduled for substitution,

B. Relevant statutes

Article 89 (Non-Taxable Transfer Income Tax of the Gu)

Article 94 (Scope of Transfer Income Tax of the Gu)

Article 96 (Value of Transfer)

Article 153 (Non-taxation for Farmland)

C. Determination

1) The plaintiff (1) and (2) as to the assertion

In light of the principle of no taxation without law, or the requirements for tax exemption or tax exemption, the interpretation of tax laws 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 grounds. In particular, the strict interpretation of the provisions that can be clearly viewed as preferential provisions among the requirements for tax exemption accords with the principle of fair taxation (see, e.g., Supreme Court Decisions 2002Du9537, Jan. 24, 2003; 97Nu4173, Oct. 24, 1997).

According to Article 89 subparag. 4 of the former Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005; hereinafter referred to as the "Act"), Article 89 subparag. 4 of the same Act and Article 153(2) and Article 153(4)2 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 19254 of Dec. 31, 2005), where a land reserved for replotting, other than farmland, is designated before a disposition of replotting, the farmland for which three years have passed from the date of the designation of the land reserved for replotting, does not fall under one’s own farmland for not less than three years subject to the exemption of capital gains tax, even if the land reserved for replotting, other than farmland, has been designated as a land reserved for replotting,

Therefore, in cases where maintaining functions as farmland at the time of transfer, the land transferred after more than three years from the date of designation of the land to be reserved is exempt from taxation, and in cases where there are justifiable grounds that the taxpayer was unable to transfer the farmland within three years from the date of designation of the land to be reserved, the Plaintiff’s assertion that the transfer of the farmland transferred within three years from the date of cancellation of the cause of the transfer interference constitutes still

Therefore, the plaintiff's above assertion is without merit.

2) Judgment on the Plaintiff’s assertion

The purpose of Article 89 subparagraph 4 of the Act, which provides for the non-taxation of capital gains tax on the substitute land of certain farmland, is to protect farmers by guaranteeing the free substitution of farmland cultivated by farmers. In order to achieve such legislative purpose, the detailed matters on this matter is recognized as a need to be delegated to the flexible administrative legislation, compared to the Act, in order to determine the scope of "large soil of farmland" in consideration of various circumstances, such as transaction reality of farmland, time required for alternative acquisition, etc.

Article 89 subparagraph 4 of the Act provides that "income accrued from substitute land for farmland falling under such cases as prescribed by the Presidential Decree" shall not be imposed. Thus, the scope of non-taxable farmland is clearly delegated to the Enforcement Decree, and the Enforcement Decree provides for the scope of non-taxable farmland under Article 153 (2) and (4). Thus, the plaintiff's above assertion premiseds that Article 153 (2) of the Enforcement Decree provides for the scope of non-taxable farmland.

Therefore, the plaintiff's above assertion is without merit.

3) Judgment on the Plaintiff’s assertion

As seen earlier, pursuant to Article 153 (4) 2 of the Enforcement Decree of the Act, since, prior to the disposition of replotting, the "farmland has been designated as the land as the land as the land as the land for replotting other than the land as the land for replotting, for which three years have elapsed since the date of the designation of the land as the land for replotting was excluded from those subject to non-taxation under Article 153 (2), the argument that "the benefit in cases where the general

In addition, in cases where farmland has been designated as a land as a land scheduled for substitution, other than farmland, the continuous increase in the land price is expected, so that the time of transfer of the farmland concerned is delayed, and thus the farmland owner will have more capital gains accruing from the transfer. Ultimately, Article 153 subparagraph 4 of the Enforcement Decree of the same Act provides that "non-taxation gains on capital gains from the transfer of land due to the transfer of land which is not possible to substitute the land as a land scheduled for substitution shall be limited to the appropriate level, while Article 153 subparagraph 4 of the Enforcement Decree of the same Act provides that "non-taxation gains on the transfer of land due to the transfer of land which has not been more than three years since the date of designation of the land scheduled for substitution shall be granted only to the transfer of land for which three years have not elapsed since the date of designation of the land scheduled for substitution, and it is recognized that the provision for non-taxation

Therefore, the plaintiff's above assertion is without merit.

4) Judgment on the Plaintiff’s assertion

If the plaintiff's assertion, the tax authority calculates the price of the relevant farmland on the date three years have elapsed since the date of designation of the land scheduled for substitution and deducts the transfer margin accrued from the date of acquisition to the date of acquisition from the tax base. Considering that the tax base of the transfer income tax is, in principle, calculated based on the actual transaction price (Article 96 (1) of the Act), it seems that the above taxation method is virtually impossible, and the plaintiff's above assertion also goes against the interpretation of Article 153

Therefore, the plaintiff's above assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.