Incheon District Court 2012Guhap4156 (26 April 2012)

It is difficult to regard the previous farmland as a congested farmland.

Since most of the labor force required for farming operations, due to a delay due to a sudden disease, is deemed to have been provided by the spouse, and the plaintiff simply exceeded the extent of subsidization, the disposition that excludes the reduction and exemption of substitute farmland on the ground that it cannot be deemed that at least 1/2 of the farming work necessary for farmland cultivation was carried out directly or by hand.

Article 70 of the Restriction of Special Taxation Act

2012Nu1353 Revocation of disposition of imposing capital gains tax, etc.

Maximum XX

The Director of Incheon Tax Office

Incheon District Court Decision 201Guhap4156 Decided April 26, 2012

August 22, 2012

October 10, 2012

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The imposition disposition of capital gains tax of 000 won (including additional tax) for the Plaintiff on August 1, 201, which the Defendant rendered to the Plaintiff on August 1, 201 shall be revoked.

1. Details of disposition;

A. On April 1, 2005, the Plaintiff acquired and owned 000 m27 m2, such as 000 m2, m200 m2, m200 m2, m200 m2, and 9 m200 m2, Apr. 4, 2006. On November 30, 2009, the Plaintiff transferred the land of the said three m2 (hereinafter “the instant farmland”) to KimA on 00 m21 m2, 200. On December 29, 2009, the Plaintiff acquired the land of the said three m21 m21 m2, m200 m2.

B. When filing a preliminary return on the tax base of capital gains tax following the transfer of the instant farmland, the Plaintiff applied for reduction or exemption of capital gains tax on the ground that the instant farmland constitutes reduction or exemption of capital gains tax due to farmland substitute land under Article 70(1) of the former Restriction of Special Taxation Act (amended by Act No. 921, Jan. 1, 2010; hereinafter “Special Taxation Act”).

C. The Defendant, on August 1, 2011, excluded the application of Article 70(1) of the Restriction of Special Taxation Act on the ground that the Plaintiff did not cultivate the instant farmland directly, issued a correction and notice of KRW 000 (including additional tax) for the transfer income tax reverted to the Plaintiff in 2009 (hereinafter “instant disposition”).

D. On October 25, 201, the Plaintiff dissatisfied with the instant disposition, filed an appeal with the Tax Tribunal on October 25, 201, but was dismissed on December 19, 201.

[Ground of recognition] Facts without dispute, Gap evidence 1, Eul evidence 1, Eul evidence 1, 4, 27, the purport of the whole pleadings

2. Determination

A. The plaintiff's assertion

Article 70 (1) of the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 2182, Dec. 14, 2009; hereinafter referred to as the "Enforcement Decree of the Restriction of Special Taxation Act") provides that "the residents are engaged in cultivating or cultivating crops or perennial plants on their own land at all times or by cultivating or cultivating 1/2 or more of them with their own labor," with regard to the meaning of "direct cultivation" as stipulated in Article 70 (1) of the Restriction of Special Taxation Act, and considering the legislative purpose of the regulations on reduction and exemption of capital gains tax for self-arable farmland, "direct cultivation" shall include the cultivation with the help of their family living or living together with their family. Since the plaintiff cultivated the farmland of this case directly by her husbandB since it was impossible to move freely due to disease from Sep. 18, 2007, the income from the transfer of the farmland of this case is subject to reduction and exemption of capital gains tax for the farmland of this case, the disposition of this case is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Relevant legal principles

According to Article 70(1) of the Restriction of Special Taxation Act and Article 67(1), (2), and (3)1 of the Enforcement Decree of the Restriction of Special Taxation Act, where a person who directly cultivated while residing in the previous location of farmland for at least three years acquires another farmland within one year (two years in cases of expropriation by consultation, expropriation under the Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor and by consultation, or by expropriation under other Acts) from the date of transfer of the previous farmland, and cultivates it while residing in the new location of farmland for at least three years, and where the area of new acquired farmland is at least 1/2 of the area of farmland to be transferred or the value thereof is at least 1/3 of the value of the transferred farmland, the tax amount equivalent to 10/100 of the capital gains tax on the

The purpose of the regulation on reduction of capital gains tax for substitute land of farmland under the Restriction of Special Taxation Act is to protect self-employed farmers and encourage agriculture by guaranteeing free substitution of farmland. Therefore, the object of reduction or exemption should be limited to the cases where the farmland cultivated by the self-employed farmer acquired and cultivated is to substitute land for cultivation.

Therefore, the requirements for reduction or exemption of capital gains tax due to substitute land for farmland shall be farmland, ① the previous land and the newly acquired land shall be farmland, ② the previous land shall be cultivated directly while residing in the previous farmland location for not less than three years, and in addition, it shall be cultivated while residing in the new farmland location for not less than three years. ③ The residence and cultivation shall begin within one year (two years in the case of expropriation, etc.) from the date of transfer of the previous land, ④ the period between the transfer date of previous land and the date of acquisition of the newly acquired land shall be within one year (two years in the case of expropriation, etc.). ⑤ The area of newly acquired farmland shall be at least 1/2 of the area of farmland transferred or the value

Here, "direct farming" means that a resident engages in the cultivation of crops or the growing of perennial plants in his own farmland at all times (in the location and location of the farmer and farmland, in the vicinity of time) or cultivates or cultivates not less than a half of the farming work with his own labor (in the direct labor force of the farmer). In addition, in order for the Plaintiff to have the capital gains tax reduced or exempted on the income accrued from the farmland substitute land, the above argument that the Plaintiff must prove all the requirements of the above argument (see, e.g., Supreme Court Decision 92Nu1893, Jul. 13, 1993).

2) Whether the provision of this case can include cases where a person receives assistance from his family members living or living in the same household.

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 special circumstances, by denying the requirements for tax exemption or tax exemption, and shall not be extensively interpreted or analogically interpreted without reasonable grounds. In particular, it accords with the principle of fair taxation to strictly interpret the provisions that clearly consider preferential provisions among the requirements for exemption or reduction accords with the principle of equity (see, e.g., Supreme Court Decision 2011Du20116, Dec. 13, 2011).

The former Regulation of Tax Reduction and Exemption Act and the Restriction of Special Taxation Act do not separately stipulate the concept of "direct farming", one of the requirements for reduction and exemption of capital gains tax, and at that time the Supreme Court interpreted that the meaning of "direct farming" includes not only cases where the transferor cultivates trees but also cases where the transferor employs another person under his responsibility and account (see, e.g., Supreme Court Decisions 94Nu96, Oct. 21, 1994; 2003Du2465, May 30, 2003). However, as the Enforcement Decree of the Restriction of Special Taxation Act was amended by Presidential Decree No. 19256, Dec. 31, 2005, the provision of this case was newly established.

However, considering that the meaning of the provision of this case is clearly defined as the cultivation with one half or more of the farming work with its own labor, and the legislative purport of the new provision of this case is unclear, which is to solve the problem of reduction and exemption of capital gains tax without actually engaging in farming, it cannot be deemed that the meaning of the above "self labor force" includes the case in which another person is employed under his/her responsibility and calculation, such as the previous precedents, and that the meaning of this case meets the self-defense requirement only where one half or more of the farming work should be in direct or hand over (see Supreme Court Decision 2010Du8423, Sept. 30, 2010).

On the other hand, Supreme Court Decision 89Nu7412 Decided May 11, 1990, etc., which the plaintiff invoked, is a precedent prior to the enactment of the provision of this case that limitedly defined the meaning of "direct farming", and it is not appropriate to apply it as it is to the interpretation of the provision of this case.

3) Whether the Plaintiff was “direct farming” of the farmland of this case

According to the plaintiff's assertion, since around September 2007, the plaintiff suffered a delay due to a sudden disease, such as a scarcity, which was formed from around 2007, and the remaining B, the husband, was able to assist the plaintiff in cultivating mecons, meat, bean, etc. in the farmland of this case. In light of the plaintiff's physical ability and the contents of the plaintiff's work, most of the labor force necessary for farming was provided by South B, the husband, and the plaintiff was merely an assistant. It is reasonable to deem that the plaintiff was merely merely her assistant (at least 1/2 of the farming work until the plaintiff suffered from the above meconsect disease, the period is not about 2 years and 5 months (it is not about April 2005 - September 2007). Therefore, it cannot be deemed that the plaintiff was in charge of 1/2 or more of the farming work necessary for cultivating the farmland of this case.

4) Sub-determination

Ultimately, since the Plaintiff failed to meet the requirements for reduction and exemption of capital gains tax due to farmland substitute land, the instant disposition is legitimate.

3. Conclusion

The claim filed by the plaintiff cannot be accepted as it is groundless. The judgment of the court of the first instance is justifiable in its conclusion. We cannot accept the appeal filed by the plaintiff.