Latvia’s parliament approved legislation on October 15 that overhauls how the country taxes cryptocurrency holdings, replacing per-trade taxation with a withdrawal-based system and introducing a one-time settlement mechanism for past obligations.
The new law taxes withdrawals from crypto investment accounts once they exceed the amount originally deposited. Holders can settle previous tax liabilities through a declaration process by paying 10% of their declared assets’ market value, addressing a common problem for early crypto buyers who lack purchase price records.
The declaration filing window runs April 1 to May 31, 2027, with taxes due by July 23, 2027. The measure aims to bring compliance to investors holding crypto acquired years ago when record-keeping was less standardized.
Path to Crypto Tax Payments
Latvia plans to allow residents to pay personal taxes with cryptocurrency as early as next year, according to Didzis Dejus, adviser to Prime Minister Andris Kulbergs on strategic planning and the new economy. “I believe that will take place next year,” Dejus said of the crypto payment option.
The initiative builds on a precedent set by Colorado, which began accepting cryptocurrency for tax payments through PayPal in 2022, with funds converted to dollars. Dejus emphasized Latvia’s ambition in the space: “We are not afraid to be the fastest country.”
Broader Fintech Strategy
The taxation overhaul is part of a wider effort announced in May 2025 to position Latvia as a fintech hub. The plan includes supporting asset tokenization alongside the tax payment system, aimed at attracting crypto firms and investors to the country.
The United List party, which won parliamentary elections on October 3, is expected to lead the next government. Prime Minister Kulbergs’ coalition formation remains ongoing, and the timing of the crypto tax payment system could depend on the composition of the incoming administration.
Latvia Finance Ministry has not publicly confirmed details of the payment plan implementation. Technical work with the payment provider handling crypto tax transactions remains incomplete, and the specific cryptocurrencies that will qualify for tax payments have not been specified.
