Latvia adopts 10% one-time crypto declaration and investment-account tax

Latvia's parliament adopted urgent amendments to the personal income tax law on Oct. 15, creating a one-time window for residents to declare crypto holdings at a flat rate and moving future taxes onto an investment-account model.

Individuals can declare crypto assets they hold as of Dec. 31, 2026, and pay 10% of the assets' market value on that date, Crypto Briefing reported. The declaration period runs from April 1 to May 31, 2027, with one correction allowed until June 30, 2027, and the tax due by July 23, 2027, paid into a unified tax account.

The scheme covers coins in accounts at European Union-licensed crypto asset service providers, known as CASPs, and assets in self-custodied addresses, according to Crypto Briefing. People already facing proceedings over tax issues tied to crypto income cannot use the provisions.

A second part of the amendments sets up an investment account for crypto-assets. Tax applies only when withdrawals from the account exceed the amounts originally invested, so trades inside the account are not taxed individually. The accounts can be offered only by EU-licensed providers operating under the Markets in Crypto-Assets regulation, or MiCA, the EU framework for licensing and supervising crypto firms.

Latvia's parliament, the Saeima, published the adopted amendments. The changes align with the EU's DAC8 directive, which requires tax authorities to exchange information automatically. Latvia earlier waived a 3% levy for non-residents for the period from 2025 to 2027 as it courted foreign crypto businesses.

The investment-account rules are narrower than the declaration window. They apply only to accounts offered by MiCA-licensed providers, so the treatment is not available on self-custodied holdings or through providers outside the EU licensing regime.

The law is not fully operational. The Cabinet of Ministers is expected to issue supporting regulations by Dec. 30, 2026, Crypto Briefing reported. The declaration base is market value at the end of 2026, so price swings before that date will change what declarants owe even though the rate itself is fixed.

Separately, an adviser to the prime minister said Latvia could let residents pay personal taxes with crypto as early as next year. Didzis Dejus, an adviser on strategic planning and the new economy, told CoinDesk at the UN:BLOCK Fintech conference in Riga that "I believe that will take place next year" when asked if Latvians would be able to pay taxes in crypto during the prime minister's term, CoinDesk reported.

The Finance Ministry has agreed to the plan, Dejus said, though technical work with a payment provider remains. He did not name the provider or say which cryptocurrencies would qualify. CoinDesk reported it had asked the ministry for comment and had not received a response.

"We are not afraid to be the fastest country," Dejus said, describing efforts to attract crypto business beyond licensing. CoinDesk reported the payment plan builds on proposals announced in May 2025 to enable crypto tax payments and the tokenization of other assets such as real estate, which the Baltic Times covered at the time.

The timing of the payment plan could depend on the next government. Prime Minister Andris Kulbergs' United List won the Oct. 3 parliamentary election and is expected to be renominated, but it still needs coalition partners, CoinDesk reported.

Dejus said the one-time declaration would help people who bought crypto years ago but lack records to prove what they paid. The 10% rate applies to market value rather than to historical cost, so a holder with large unrealized gains from an early purchase may weigh the charge differently from someone who bought near a peak, Crypto Briefing noted.

Latvia would not be the first government to accept crypto for taxes. Colorado began allowing residents to pay taxes with cryptocurrency through PayPal in 2022, with the funds converted into dollars, CoinDesk reported.