Korean tax authority to apply 'total average method' to tax crypto gains

Ahead of introducing taxation on cryptocurrency gains starting Jan. 1 next year, the South Korean tax authority is considering applying the "total average method" when calculating the purchase price of virtual assets. Citing sources familiar with the matter, the Korea Economic Daily reported that the National Tax Service recently conducted discussions with crypto exchanges about adopting the "gross average method." This approach calculates the purchase price of cryptocurrencies by averaging the unit price at the end of the valuation period in one single calculation. Despite the potential introduction of the gross average method, it remains uncertain whether a fair taxation plan can be established, given the complex nature of virtual assets. This method faces challenges, particularly in accurately determining purchase prices for income from decentralized exchanges, swap transactions and mining. Moreover, gaining cooperation from overseas crypto exchanges poses an obstacle.