Union Financial Disclosure Moved Up by 3 Months, Implemented from Next Month..."Urgent Need to Enhance Transparency"

Amendment to Income Tax Act Enforcement Decree Re-Notified for Public Comment Until the 11th

The enforcement date of the amendment to the Enforcement Decree of the Income Tax Act, which grants tax credit benefits on union dues when labor unions disclose their accounting, will be moved up by three months to the 1st of next month. This decision was made based on the urgent need to strengthen the transparency of union accounting.

The Ministry of Employment and Labor and the Ministry of Economy and Finance announced on the 5th that they will re-announce the amendment to the Enforcement Decree of the Income Tax Act containing this content until the 11th.

A government official explained, "Although it was originally scheduled to be enforced from January 1 next year, considering the importance and urgency of strengthening the transparency of labor union accounting, and to meet the expectations of union members and the public for transparent accounting operations of labor unions, the enforcement of the system has been advanced from the original schedule."

The "Labor Union Accounting Disclosure System," where unions disclose their settlement results, is scheduled to open on the 1st of next month. Unions and their subordinate organizations can disclose the 2022 settlement results on the disclosure system during the two months from October 1 to November 30.

If a union (or its subordinate organization) and its higher-level organization disclose their accounting, union members will receive tax credit benefits on union dues paid from October to December this year. Union members can check whether the union has disclosed through the disclosure system and apply for the union dues tax credit during the year-end tax settlement in January next year.

The government plans to fully prepare for the system implementation by preparing an accounting disclosure manual to enable labor unions to easily disclose their accounting and conducting online and offline training for labor unions.

So far, the government has focused on creating conditions for union accounting disclosure by enhancing union members' right to know about union accounting through measures such as inspecting the maintenance and preservation of union accounting books and providing opportunities to re-examine union accounting operations.

On June 15, the government announced a draft amendment to the enforcement decree requiring unions to disclose their accounting settlement results and excluding unions that do not comply from tax credit eligibility. At that time, Minister of Employment Lee Jeong-sik said, "Organizations receiving donation tax credits mostly had to submit related documents based on accounting transparency to receive them, but unions have received special treatment so far," adding, "Since public taxes are involved, the public naturally has the right to know."

In response, the Federation of Korean Trade Unions (FKTU) and the Korean Confederation of Trade Unions (KCTU) are opposing the measure. The FKTU claimed it was "aimed at humiliating unions," stating, "They are threatening to remove the tax credit benefits on union dues while claiming to support democratic and transparent union operations."

Minister of Employment and Labor Lee Jeong-sik is holding a press conference on June 15 at the Government Seoul Office to announce the legislative notice of the amendment to the Enforcement Decree of the Labor Union Act and the Enforcement Decree of the Income Tax Act to enhance the transparency of union accounting.
[Photo by Yonhap News]

This content was produced with the assistance of AI translation services.