Latvia Seeks to Allow Tax Payments in Virtual Assets Next Year, Revamps Crypto Tax Rules

Latvia is moving to allow individuals to pay taxes with virtual assets as early as next year as it seeks to attract cryptocurrency companies and investors.

CoinDesk reported on October 18 that Didzis Dejus, an adviser to the Latvian prime minister on strategic planning and the new economy, told the UN:BLOCK fintech conference in Riga that tax payments using virtual assets could become available next year.

Dejus said the Finance Ministry has agreed to the plan and that only technical preparations with payment service providers remain. He did not disclose details such as the launch date, which virtual assets would be accepted or which payment service providers would participate.

Latvia's parliament also passed a bill on October 15 revising the tax framework for virtual-asset investments. Under the current system, taxes are levied on individual transactions. The new framework instead taxes withdrawals from a virtual-asset investment account only when the amount withdrawn exceeds the original principal invested.

A one-time disclosure program will also be introduced to settle past tax liabilities related to virtual-asset investments. Investors will be able to clear those obligations by applying a 10% tax rate to the market value of assets held as of the end of 2026. The filing period will run from April 1, 2027, through May 31, 2027, and the tax must be paid by July 23, 2027.

Still, the timing of the tax-payment system could depend on the formation of the next government. Latvia held a general election on October 3, and coalition talks to form the next administration are still pending. Dejus emphasized that Latvia aims to go beyond licensing virtual-asset operators and actively attract the broader industry.