Following the Korean Confederation of Trade Unions, the Federation of Korean Trade Unions Joins 'Accounting Disclosure'

The Korean Confederation of Trade Unions (KCTU) will follow the government’s policy to mandate union accounting disclosure, following the Federation of Korean Trade Unions (FKTU).

Yang Kyung-soo, Chairman of the Korean Confederation of Trade Unions. Photo by Yoon Dong-joo doso7@

On the 24th, KCTU held a Central Executive Committee meeting at its office in Jung-gu, Seoul, where it decided on this policy. KCTU explained that the move aims to prevent affiliated union members from suffering disadvantages such as losing tax deduction benefits.

The Ministry of Employment and Labor previously amended the Enforcement Decree of the Labor Union Act and the Enforcement Decree of the Income Tax Act to strengthen union accounting transparency. According to the amendments, if a union does not disclose its accounting, union dues will not be eligible for tax deduction benefits during year-end tax settlements. The union accounting disclosure system was launched earlier this month and is currently accepting registrations. If the two major trade union federations, FKTU and KCTU, do not disclose their accounts, their affiliated organizations will also be excluded from the tax deduction benefits.

Until now, union dues were classified as designated donations, allowing a tax credit of 15% (30% for amounts exceeding 10 million KRW) of the paid amount. Based on last year’s average monthly salary of 3,526,000 KRW, assuming 1% is paid as union dues, the tax credit amount would be 63,468 KRW.

The Ministry of Employment and Labor imposed the accounting disclosure obligation only on unions with more than 1,000 members. However, it pressured the two major federations by adopting a "guilt-by-association" system, excluding affiliated organizations from tax deduction benefits if the higher-level federation does not disclose its accounts.

While KCTU announced it will comply with the government’s policy, it criticized, saying, "The Yoon Suk-yeol administration should stop disputes over union accounting and halt union suppression and labor reforms." It pointed out that "the accounting disclosure obligation was imposed threefold or fourfold on unions with higher-level organizations, suppressing union solidarity." It added, "The amended Enforcement Decrees of the Labor Union Act and Income Tax Act force unions to comply with provisions not delegated by the parent laws, exceeding the scope of delegated legislation," and pledged to "push for unfair amendments to the Labor Union Act and Income Tax Act."

Meanwhile, FKTU announced the day before that it will disclose its accounts "to prevent any harm to members such as exclusion from union dues tax deduction benefits." However, separate from disclosing accounts, FKTU plans to file a constitutional complaint against the operation of the guilt-by-association system and will recruit petitioners until July 3.

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