From Next Year, Labor Union Dues Tax Credit Requires Accounting Disclosure

Government Announces 40-Day Legislative Notice
Targeting Large Unions with Over 1000 Members

From next year, labor unions with more than 1,000 members will be required to disclose their financial statements in order to receive tax credit benefits on union dues.

On the 15th, the government announced a 40-day legislative notice period for the 'Enforcement Decree of the Labor Union Act' and the 'Amendment to the Enforcement Decree of the Income Tax Act' to enhance transparency in union finances. These are expected to be submitted for approval at the Cabinet meeting in August and come into effect from January 1 of next year.

The disclosure requirement for financial statements to receive tax credit benefits on union dues applies to large unit unions and their subordinate organizations with 1,000 or more members. Higher-level organizations and industrial unions that share tax benefits through the allocation of union dues must also disclose their financial statements to receive these benefits.

This will apply to union dues paid next year by unions that disclosed their financial statements this year. Unions must disclose the previous fiscal year's financial results by April 30 each year through the union financial disclosure system operated by the Ministry of Employment and Labor. The system is scheduled to be established on the Labor Portal in September this year.

Additionally, union representatives must publicly announce the financial results and operational status within two months after the end of the fiscal year (three months if audited by an accountant or accounting firm) through a bulletin board or other methods easily accessible to all union members.

A government official stated, "Just as other donation organizations receive tax benefits under strict accounting management requirements such as financial statement disclosure, the purpose is to increase the accountability of labor unions' financial management so that transparent organizations can receive support funded by the public's taxes."

Kim Ki-hyun, leader of the People Power Party, is speaking at the Civil-Government-Party Council on Strengthening Labor Union Accounting Transparency held at the National Assembly in Yeouido, Seoul, on March 13. Photo by Kim Hyun-min kimhyun81@

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