Latvia plans to allow citizens to pay taxes using cryptocurrency as early as 2027, according to CoinDesk. The Ministry of Finance has approved the initiative, but authorities must complete technical preparations for the payment infrastructure before it can begin.

CoinDesk cited Didzis Dejus, the prime minister’s adviser on strategic planning and the new economy. Dejus said the government intends to attract crypto companies and investors, including by developing asset tokenization.

Authorities have not selected a payment provider or determined which cryptocurrencies the state will accept. Dejus said the mechanism is expected to launch in 2027, although the timing may depend on the formation of a new government after parliamentary elections.

Parliament changes crypto tax rules

On Oct. 15, 2026, Latvia’s Saeima adopted final-reading amendments to the Personal Income Tax Law that extend the investment account regime to crypto assets.

Under the amended rules, tax will not arise after each transaction. Instead, it will apply when withdrawals from an investment account exceed the total amount deposited. Crypto companies licensed in the European Union may provide such investment account services.

Parliament also approved a one-time cryptocurrency declaration mechanism. The tax rate will equal 10% of the market value of the declared crypto assets as of Dec. 31, 2026.

Eligible taxpayers may file declarations from April 1 through May 31, 2027. They may update the submitted information once, until June 30, 2027, and must pay the assessed tax by July 23, 2027.

The mechanism covers assets held with EU-licensed providers and assets stored at self-custodied addresses controlled by their owners.

After a taxpayer files the declaration and pays the tax, the stated market value will become the basis for calculating future taxable profit. For the declared assets and the funds used to acquire or exchange them, obligations to declare income and pay taxes for the period through Dec. 31, 2026, will be considered fulfilled.

The mechanism will not be available to individuals already subject to criminal, tax or administrative proceedings related to cryptocurrency income.

The government must approve requirements for providers of cryptocurrency investment account services by Dec. 30, 2026.

EU reporting rules

The EU has also begun implementing crypto-asset tax reporting rules under the DAC8 directive. The rules provide for the collection of information about users’ transactions and the exchange of that data among tax authorities in EU member states.

Source: Incrypted