Latvia Will Allow Taxes to Be Paid in Cryptocurrency from 2027

Latvia will allow taxes to be paid in cryptocurrency from 2027, and the new regime has already been approved by the Ministry of Finance. This is news for crypto investors, companies, and those working with digital assets in the EU.

The plans were announced after the initiative was coordinated in government. According to Didzis Dejuss, the prime minister’s adviser on strategic planning and the new economy, the country still needs to complete the technical preparation of the payment infrastructure. That is the main barrier right now. And it is not a minor one.

The Latvian government wants not just to simplify payments. It also expects to attract crypto companies and investors to the country. For a small market, that is a logical step. But all of this will only start working once the system is technically ready.

Why is Latvia betting on crypto payments?

The logic here is fairly pragmatic. Latvia is trying to make its market more attractive for businesses that work with crypto assets. If the state allows taxes to be paid in digital assets, that reduces friction for companies and private investors.

For the EU, this is also a telling signal. The Baltic states have been competing for fintech and crypto business for several years, because it brings in taxes, jobs, and new company registrations. In Latvia, this is especially noticeable against the backdrop of the launch of MiCA licensing. It will only get more interesting from here.

Against this backdrop, it is also worth mentioning the recent news about European banks and an euro stablecoin license. The market in Europe is clearly moving toward more formal rules. And Latvia wants to be in the first wave, not catch up later.

What exactly will change for taxpayers?

According to data released during the preparation of the reform, the Saeima of Latvia adopted urgent amendments to the personal income tax law on October 15, 2026. Owners of crypto assets will be able to submit a one-time declaration from April 1 to May 31, 2027. It can be corrected once until June 30, and the tax itself must be paid by July 23, 2027.

The rate will be 10% of the market value of the assets as of December 31, 2026. This is an important detail. In other words, the state fixes the valuation base in advance instead of forcing people to calculate every minor price change along the way.

There is another point. An investment account regime is being introduced for crypto investors. The tax will arise not from each transaction, but when the withdrawal amount exceeds the amount of contributions. The service may be provided by crypto providers licensed in the EU, and the government must approve the rules for them by December 30, 2026.

“The government aims to attract crypto companies and investors to the country,” said Didzis Dejuss, explaining the logic of the reform.

Market reaction

The immediate market effect here is not on the price of Bitcoin or Ethereum. It is on company behavior. When a state provides a clear tax model, it is easier for businesses to plan operations, accounting, and compliance. This is often exactly what small jurisdictions lack.

The European framework is also becoming stricter. From January 1, 2026, DAC8 will apply in the EU, and the first exchange of tax information for 2026 is expected by September 30, 2027. In other words, anonymity in the tax sense is continuing to narrow. This matters for those who are used to operating without documents.

To avoid getting lost in the details, here is the main point in brief.

• Latvia plans to allow taxes to be paid in cryptocurrency from 2027.

• A one-time declaration can be submitted from April 1 to May 31, 2027.

• Declaration corrections will be allowed until June 30, 2027.

• The tax must be paid by July 23, 2027.

• The rate will be 10% of the value of the assets on December 31, 2026.

• The rules for providers must be approved by December 30, 2026.

Against this backdrop, investors should remember the other side of tax discipline. In Latvia, since 2025, profit from the sale of crypto assets has already been taxed as capital gains at a rate of 25.5%. If the original purchase price cannot be proven, it is considered to be 0 euros. Documents must be kept for 5 years.

What does this mean for investors?

For private crypto holders, this means less manual work and less chaos in reporting. But there is an important condition: without proper transaction records, the new scheme will not help. If a person cannot prove the origin of the assets, the tax logic will still be strict.

For business, the signal is even stronger. Latvia has already issued its first MiCA licenses, and in December 2025 the local agency reported interest from more than 100 companies in licensing. This means the country is trying to become not just convenient for payments, but also understandable for operating across the entire EU market.

There is also a practical takeaway for Ukrainian readers. If you store crypto abroad or often work with European services, tax transparency in the EU will only increase. That is why paperwork, transaction history, and clear accounting are becoming not a formality, but a real necessity. Otherwise, you will have to explain everything retroactively later.

For those who are already planning BTC transactions, a convenient option may be a quick conversion to hryvnia without extra steps, for example sell Bitcoin on Monobank.

Frequently asked questions

When will Latvia allow taxes to be paid in cryptocurrency?

The planned launch is called for 2027. At the same time, the technical preparation of the infrastructure still needs to be completed, and the rules for providers must be approved by December 30, 2026.

What tax rate will apply to crypto assets?

In the one-time declaration, the rate will be 10% of the market value of the assets as of December 31, 2026. Separately, in Latvia since 2025, profit from the sale of crypto assets has been taxed as capital gains at a rate of 25.5%.

Will every transaction need to be reported?

No, under the investment account, the tax will not arise from each transaction. It will appear when the withdrawal amount exceeds the amount of contributions.

Latvia is betting on simpler rules and greater transparency. For the crypto market, this is not a loud gesture, but a very concrete signal: Europe is gradually bringing digital assets into a normal tax system. And for those who want to quickly exchange coins for fiat, sell USDT TRC20 on Monobank may come in handy.

This material is not financial advice. Cryptocurrency trading involves significant risks. Part of this text was prepared with the help of artificial intelligence based on public sources and reviewed by our editorial team.