Latvia crypto tax payments planned after new investment law

Latvia crypto tax payments could become possible as early as next year, an adviser to the prime minister said on Oct. 18. Didzis Dejus told CoinDesk at a fintech conference in Riga that the Finance Ministry backs the idea but technical work with a payment provider is still needed. Asked if it would happen during the prime minister's term, he said, "I believe that will take place next year."

What happened

Dejus spoke three days after the Saeima, Latvia's parliament, passed a crypto tax overhaul in its final reading on Oct. 15. Under the new rules, passed as urgent amendments to the personal income tax law, holders who use a crypto investment account are taxed when withdrawals exceed the amount deposited, rather than on each trade. Investment accounts can be offered by crypto service providers licensed in the European Union. Committee chair Aiva Vīksna said earlier that tax rules must keep pace with fast-changing financial markets and that the changes give clearer rules while letting residents settle past obligations.

The law also adds a one-time declaration. Holders can settle past obligations by paying 10% of the market value of crypto they hold at the end of 2026, according to the Saeima's announcement. Declarations can be filed with the State Revenue Service from April 1 to May 31, 2027, with one correction allowed until June 30, and the tax is due by July 23, 2027.

The declaration covers crypto held on Dec. 31, 2026, at EU-licensed providers or in self-custody addresses, and the declared value becomes the purchase price for future tax purposes. People who declare and pay are treated as compliant for the period through 2026. The option is not open to people facing criminal proceedings, tax audits or related cases. The Cabinet must adopt rules for investment-account providers by Dec. 30, 2026.

Why it matters

The declaration is aimed at long-term holders who bought years ago and cannot prove what they paid, Dejus said. A flat 10% on current value gives them a way into the regulated system without reconstructing old trades.

Taxing withdrawals instead of every swap also simplifies life for active traders, who would otherwise face a bill on each exchange between tokens. France has debated the opposite approach, a tax on stablecoin swaps, covered in our report on the French stablecoin swap tax.

"We are not afraid to be the fastest country," Dejus said. Latvia crypto tax payments would build on plans first announced in May 2025 to allow crypto tax payments and the tokenization of assets such as real estate. Colorado has accepted crypto for taxes through PayPal since 2022, with funds converted into dollars.

What's next

Politics could shape the timetable. Prime Minister Andris Kulbergs' United List won the Oct. 3 election and is expected to be renominated, but it still needs coalition partners, CoinDesk reported. Dejus did not name the payment provider or say which coins would qualify, and a provider must be chosen before Latvia crypto tax payments can start. CoinDesk said the Finance Ministry had not responded to its request for comment.

Next comes the Cabinet's implementing rules and the first declaration window in spring 2027. Timelines elsewhere are slipping too: Illinois is seeking to delay its own digital asset tax by six months.