Latvia plans crypto tax payments as parliament revamps digital asset taxation

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Latvia crypto tax plan

Highlights

Latvia's Finance Ministry plans to allow personal tax payments in cryptocurrency in 2025, pending technical collaboration with an unnamed payment provider.
Latvia's parliament passed new legislation on Oct. 15 taxing only withdrawals from crypto investment accounts exceeding deposits, rather than individual trades.
The law introduces a one-time asset declaration window for past holdings, permitting investors to settle earlier tax liabilities at 10% of 2026 market value with payment due by July 23, 2027.

Tax payment plan and new rules

As reported by CoinDesk, Latvia's Finance Ministry has agreed to a plan that could let residents pay personal taxes with cryptocurrency next year, pending technical work with a payment provider. Didzis Dejus, an adviser to the prime minister on strategic planning and the new economy, said at the UN:BLOCK Fintech conference in Riga that he believes the system will be in place during the next year.

The change would give crypto holders a direct way to use digital assets to settle tax liabilities. It also extends plans announced in May 2025 to enable crypto tax payments and support tokenization of other assets, including real estate.

On Oct. 15, parliament passed legislation changing how crypto investments are taxed. Instead of taxing each individual trade, the new law taxes withdrawals from crypto investment accounts once they exceed the amount deposited.

The legislation also creates a one-time declaration mechanism for past holdings. Investors can settle earlier tax obligations by paying 10% of the declared market value of their assets at the end of 2026, with declarations accepted from April 1 to May 31, 2027, and payment due by July 23.

Implications for investors and Latvia's market strategy

Dejus said the declaration process is designed to help people who bought crypto years ago but do not have records showing their original purchase prices. That could ease a practical compliance problem for early adopters and encourage more holders to regularize their tax status.

The broader policy reflects Latvia's effort to attract crypto companies and investors beyond the licensing stage. Dejus said the country is willing to move quickly to build a more competitive environment for digital asset businesses.

The timing of crypto tax payments could still depend on political negotiations after the Oct. 3 parliamentary election. Prime Minister Andris Kulbergs' United List won the vote and is expected to be renominated, but it still needs coalition partners to form the next government.

Latvia is not the first jurisdiction to move in this direction. Colorado began allowing crypto tax payments through PayPal in 2022, with the digital assets converted into U.S. dollars, while Latvian officials have not yet identified the payment provider or specified which cryptocurrencies would be accepted.

In our earlier coverage of Pakistan’s Tax Year 2026 income tax filing process, we noted growing pressure on the Federal Board of Revenue to extend the submission deadline amid complaints about IRIS portal glitches and procedural hurdles. The article outlined arguments from tax experts and business groups that taxpayers need more time after the final return form notification, and that unresolved extension requests could raise compliance risks and potential penalties.

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