Latvia’s government plans to allow individuals to pay taxes with cryptocurrencies starting in 2027. At the same time, the country is reforming its digital asset taxation system.
Didzis Dejus, adviser to Latvia’s prime minister on strategic planning and the new economy, said the Ministry of Finance approved an initiative to allow tax payments in cryptocurrencies. The option could become available as early as 2027.
The initiative follows Latvia’s efforts to attract cryptocurrency companies and investors. In January 2025, the government backed a proposal to eliminate taxes on income earned by nonresidents from the sale of crypto assets. Parliament approved the corresponding amendments in April.
On October 15, 2026, Latvia’s parliament also passed legislation introducing a new taxation model for cryptocurrency investments. Instead of taxing each individual transaction, tax liabilities will arise when funds are withdrawn from a cryptocurrency investment account and total withdrawals exceed the amount deposited.
Under the new model, investors will be able to conduct transactions within their investment accounts without calculating taxes on each transaction. Only withdrawals exceeding the invested capital will be subject to taxation.
The law also introduces a one-time declaration mechanism for previously acquired crypto assets. The provision is intended in part for investors who purchased cryptocurrencies several years ago and no longer have documents confirming their original acquisition costs.
The mechanism for settling past tax liabilities includes the following conditions:
Tax rate: 10% of the market value of declared crypto assets as of the end of 2026;
Declaration period: April 1 through May 31, 2027;
Tax payment deadline: July 23, 2027.
According to Dejus, the mechanism will allow cryptocurrency holders to regularize the tax status of previously acquired assets without having to reconstruct years of transaction history.
Although the Ministry of Finance approved the initiative, the timeline for introducing cryptocurrency tax payments remains uncertain. No specific payment provider has been named, and it’s still unclear which cryptocurrencies will be accepted for tax payments or how their conversion will be handled. Implementation will depend on the composition of Latvia’s new government.
Latvia is also among the 48 countries that began collecting data on users’ cryptocurrency transactions as part of the rollout of the global tax transparency framework known as the Crypto-Asset Reporting Framework (CARF).
