Cho Gyeong 201 Jeon 4835 ( December 27, 2011)

Provisions excluding non-business land for the farmland owned at the time of this farming are applicable only to the person who has transferred the farmland.

The provision that excludes the idle land for the farmland owned at the time of this farming shall apply only to the person who moved to farming before December 31, 206, and also to the case where the agricultural management is continued without the farming, it shall not be accepted in light of the legal principles and the legislative purport of the provision on the land for non-business.

Article 104-3 of the Income Tax Act

2012 old-gu 626 Revocation of Disposition Rejecting Transfer Income Tax Correction

XX

The Director of the National Tax Service

June 21, 2012

July 19, 2012

1. The plaintiff's claim is dismissed.

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

The defendant's rejection disposition against the plaintiff on July 22, 201 against the plaintiff shall be revoked.

1. Details of the disposition;

A. From June 28, 2004, the Plaintiff, who had resided in the Dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong-dong 00-2, 1,032 square meters prior to the same 000 square meters, 845 square meters prior to the same 00-2, and 00-3 square meters prior to the same 00-3 square meters (hereinafter referred to as the “instant land”).

B. On May 31, 2007, the Plaintiff transferred the instant land to XX Co., Ltd., Ltd., and then reported and paid KRW 000 of the transfer income tax for the year 2007 by applying the tax rate of 60/100, deeming that the instant land was located in the urban area and constitutes the non-business land provided for in Article 104-3 of the Income Tax Act (hereinafter “Act”).

C. After that, on May 27, 201, the Plaintiff filed a request for correction to the Defendant for refund of KRW 00 of the capital gains tax reported and paid as above on the ground that the land in this case falls under the “land transferred until December 31, 2006 as farmland owned by the person who transferred the land before December 31, 2006, as farmland owned by the person who transferred the land in this case, falls under the “land transferred until December 31, 2009,” and should be excluded from the non-business land.

D. On July 22, 2011, the Defendant rejected the Plaintiff’s request for correction on the ground that the instant land does not fall under the land stipulated in the instant provision for reduction and exemption (hereinafter “instant disposition”).

E. On October 19, 201, the Plaintiff filed an appeal with the Tax Tribunal against the instant disposition, but was dismissed on December 27, 2011.

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 1, Eul evidence Nos. 1 and 2 (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In the Act, as one of the exceptions to the heavy taxation of capital gains tax in the case of land for non-business use, the "land transferred until December 31, 2009 as farmland owned by a person who transferred before December 31, 2006 under Article 6 (2) 5 of the Farmland Act" is defined as the "land transferred until December 31, 2009 as farmland owned by him at the time of transfer under Article 6 (2) 5 of the Farmland Act" and is excluded from land for non-business use even if it falls under farmland incorporated into an urban area

If the provision of this case applies only to the transfer of farmland by a person of farming, and if it is interpreted that the provision of this case does not apply to the transfer of farmland by a person who continues agricultural management without farming, it would be more favorable to farmers than agricultural managers, thereby going against the principle of equity, and also violates the purpose of the heavy taxation system for non-business land.

Therefore, the provision on reduction and exemption of this case shall apply to cases where the farmland incorporated into an urban area is continuously managed by agriculture without the Plaintiff as the Plaintiff.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) The land of this case is a land category prior to the Plaintiff’s acquisition of the land of this case, and there is no dispute between the parties as to the fact that the land was incorporated into an urban area from before the Plaintiff acquired the land of this case. Thus, the land of this case constitutes non-business land under Article 104-3

2) However, according to the provisions of Article 104-3(2) of the Act, Article 168-14(3)5 of the Enforcement Decree of the Act, and Article 83-5(3)2 of the Enforcement Rule of the Act, where a person who transferred farming before December 31, 2006 transfers farmland owned by him/her at the time of this farming pursuant to Article 6(2)4 of the Farmland Act until December 31, 2009 as farmland owned by him/her at the time of this farming, it shall not be deemed land for non-business use on the grounds that there are unavoidable reasons.

If the instant land falls under the reduction or exemption provisions of this case, the Plaintiff should be deemed to fall under the “person who transferred to the farm before December 31, 2006.” However, the Plaintiff did not transfer to the present time and continued agricultural management, as there is no dispute between the parties, it is difficult to view the reduction or exemption provisions of this case as being applicable.

In addition, 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 it shall not be extensively interpreted or analogically interpreted without any reasonable reason, and in particular, it shall be in line with the principle of fair taxation to strictly interpret the provisions that clearly mean preferential provisions among the requirements for reduction and exemption in accordance with the principle of no taxation without law (see Supreme Court Decision 2008Du11372, Aug. 20, 2009). Therefore, the Plaintiff’s assertion that the provision on reduction and exemption in this case shall apply even if the farmland is not carried out, is prepared to continuously increase land prices due to urban development (in the case of farmland incorporated into an urban area as in this case as in the land, the continuous increase in land prices due to urban development). Therefore, it is difficult to accept the transfer income tax on the land as the non-business land in light of the legislative purport of the above legal doctrine and the provisions on non-business land.

Therefore, the disposition of this case which rejected the plaintiff's request for correction by deeming the land as the land for non-business use is legitimate.

3. Conclusion

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