2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

A. The Plaintiff, as a sales place of Nusskin Inc., a U.S. corporation, is a director of the Australia Corporation, which conducts multi-level marketing business, etc.; the International Pty Ld (hereinafter “instant Australia”); and a stockholder who holds 10% (one share out of 10 shares issued) of the shares of the said corporation. Meanwhile, the Plaintiff, who established the instant Australia, together with the Plaintiff, was registered as a representative director of the instant Australia Corporation, and held 70% of the shares of the said Corporation.

B. The Australian Corporation transferred a considerable portion of its sales to an account under the name of the above Seoul Metropolitan Office (hereinafter “Seoul Office”) located in OO-5 OO-5 OO-502, 2006 through 2010, and the Plaintiff received approximately KRW OOOO from the Seoul Office from 2006 to 2010, and received approximately KRW OOOOO from the instant Australia Corporation during the same period.

C. As a result of the tax investigation into the Seoul Office, the director of the Seoul Regional Tax Office confirmed that the Plaintiff received money from the Australia Corporation and the Seoul Office as above, and deemed that the Plaintiff, as a resident under tax law, did not report and pay the comprehensive income tax even after acquiring domestic and foreign earned income, and notified the Defendant of the taxation data by identifying the above OOOOO as domestic and foreign earned income.

D. On July 1, 2012, the Defendant notified the Plaintiff of the foregoing taxation data, issued a correction and notification of the global income tax (including additional tax), ○○○○○ (including additional tax), 2008 global income tax (including additional tax), ○○ (including additional tax), ○○ (including additional tax), and ○○ (including additional tax) of global income tax for the year 2009, and 2010.

E. Although the Plaintiff appealed and filed an appeal, the Plaintiff was dismissed on November 4, 2013.

[Ground of recognition] Facts without dispute, Gap evidence 2-1 to 4, Gap evidence 3, Eul evidence 1-1 to 4, the purport of the whole pleadings

【Ground statute】

/ Income Tax Act

Article 2 (Liability for Tax Payment)

(1) Any of the following individuals shall be liable to pay income tax on his/her income pursuant to this Act:

1. A resident;

Article 3 (Scope of Taxable Income)

(1) A resident shall be taxed on all income prescribed by this Act.

Article 4 (Classification of Income)

(1) Income of a resident shall be classified as follows:

(d) Earned income;

1) While the Income Tax Act and the Enforcement Decree of the same Act were amended several times during the instant taxable period, there were no substantial changes in the contents of the statutory provisions that served as the basis for the instant disposition, only the current statutes are presented.

Article 20 (Earned Income)

(1) Earned income shall be the following income, generated in the relevant taxable period:

1. Salary, salary, remuneration, annual allowance, wage, bonus, allowance, and other benefits of a similar nature, which are received in furnishing labor;

2. Income received as a bonus by a resolution of the general meeting of stockholders or general meeting of members of a corporation or similar deliberative organ;

3. The amount treated as a bonus under the Corporate Tax Act;

4. Income received upon retirement, which is not included in the retirement income.

【Tax Treaty with Australia

Article 15 (Subordinate Personal Services)

1.Subject to the provisions of Articles 16, 18, 19, and 20, salaries, wages, and other similar remuneration derived by an individual who is a resident of a Contracting State in respect of employment shall be taxed only in a Contracting State unless the employment is carried out in the other Contracting State. If the employment is carried out in the other Contracting State, such remuneration accruing from it may be taxed in the other Contracting State.

【Enforcement Decree of the Income Tax Act

Article 38 (Scope of Earned Incomes)

(1) The earned income referred to in Article 20 of the Act shall include the following incomes:

1. Expenses for confidential matters (including the advertising fund; hereinafter the same shall apply), social expenses, and salary which is given under other similar names and is not certain to be used for the business;

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff, along with the KimA around 1992, established the instant Australia, but around February 2003, the Plaintiff agreed between KimA and KimA to acquire 30% of the net income of the instant Australia and not to participate in the management. The money that the Plaintiff received through the Seoul Office was business profit under the foregoing agreement. The money that the Plaintiff received through the instant Seoul Office was the business profit under the said agreement, and the money that was directly paid from the account of the instant Australia was paid through the corporate account in divorceed with the KimA around 2004.

Although the Plaintiff did not provide labor for the instant Australia Corporation or Seoul Office or participated in the management of the instant Australia Corporation, the instant disposition made on a different premise is unlawful.

B. Determination

1) Facts of recognition

The following facts may be acknowledged as either in dispute between the parties or in Gap evidence Nos. 1, 3, and 4 by integrating the purpose of the whole pleadings.

A) On February 5, 2003, the Plaintiff and KimA drafted a written consent that “70% of the net earnings received from NN companies by the instant Australia,” and that “30% of the earnings received from N companies, shall be distributed to the Plaintiff, and that the management of the instant Australia corporations shall be entrusted by KimA” (hereinafter referred to as “instant written consent”).

B) On July 2, 2004, the Plaintiff and KimA were divorced upon the establishment of divorce mediation at the Seoul Family Court, and the above protocol of mediation recognizes the validity of this case’s consent. KimA merely operates NN’s role and business in the trade name of MM and shall not engage in any other business without the Plaintiff’s prior written consent. If the damage was incurred due to the operation of another business or the collection from the State was made by the Plaintiff without the Plaintiff’s prior written consent, the Plaintiff is not liable for any civil and criminal liability regarding the business of MM since September 1, 2002. < Amended by Presidential Decree No. 17517, Sep. 1, 2002>

KimA includes the fact that the plaintiff will pay the child support OOO and his/her children's study expenses.

C) The Plaintiff was residing in the Republic of Korea since 2006, and the Seoul Office did not run its own business, and there was no income generated independently from the Seoul Office, and the Plaintiff did not provide labor at the Seoul Office.

D) Meanwhile, the Plaintiff reported the money directly received from the instant Australia corporation as earned income to the Australian tax authority.

2) Determination

A) The Defendant asserts that, as the underlying provision of the instant disposition, Article 20(1)1 of the Income Tax Act and the latter part of Article 15 subparag. 1 of the Tax Treaty with Australia, the Plaintiff’s earned income as a resident can be imposed not only in Australia but also in Korea as well as in Australia. Although the Plaintiff is not a member of the instant Australia corporation, insofar as the Plaintiff was a director of the said corporation and a shareholder of the said corporation, insofar as the Plaintiff participated in the management of the corporation, the money received from the instant Australia corporation or the Seoul Seoul Office

B) As long as the instant disposition is related to the Plaintiff’s earned income during each taxable period, in order to be lawful, it shall be recognized that the Plaintiff provided actual labor in any way, such as participating in the management of the Australia Corporation or Seoul Office, and received the instant money (Article 20(1)1 of the Income Tax Act). This is a fact pertaining to the taxation requirements and the Defendant bears the burden of proving that the Defendant was not subject to the bonus disposition under the Corporate Tax Act (see, e.g., Article 20(1)3 of the Income Tax Act, and the Defendant did not refer to the grounds for taxation even Article 20(3)

However, in full view of the above facts and the purport of the entire pleadings, the following circumstances revealed, namely, ① the Plaintiff did not participate in the management of the Australia Corporation from February 2003, ② the Plaintiff divorced from KimA, the representative director of the Australia Corporation around July 2004, and most of the Plaintiff stayed in Korea from around July 2006. ③ The Plaintiff only held 10% of the shares of the Australia Corporation, and the remainder of the shares were owned by KimA and KimA, and there is no circumstance to deem that the Plaintiff was involved in the management of the Australia Corporation. ④ The Seoul Office did not dispute about the fact that the Plaintiff did not voluntarily run a profit-making business and the Defendant did not provide labor for the Seoul Seoul Office, ④ The Plaintiff did not have any evidence to support the Plaintiff’s direct employment of the Australia Corporation or that it was difficult for the Plaintiff to support the Plaintiff’s permanent employment of the Australia Corporation, in light of the fact that there was no evidence to support the Plaintiff’s domestic employment.

3) Therefore, the instant disposition taken on the premise that the Plaintiff provided labor for the Australia Corporation or Seoul Office is unlawful.

3. Conclusion

The plaintiff's claim of this case is reasonable, and it is so decided as per Disposition.