Latvia's parliament has approved changes that would bring eligible crypto investments into an investment-account tax regime, shifting the point of taxation toward withdrawals exceeding contributions rather than treating every trade as a separate taxable event within the arrangement.
The Saeima adopted the personal-income-tax amendments in a final reading on October 15. Its announcement says crypto-asset service providers licensed in the European Union will be able to offer the investment-account service.
The package also creates a one-time declaration route for qualifying crypto holdings. It is distinct from a separate ambition to let residents pay tax bills using cryptocurrency, which an adviser to the prime minister described in an October 18 CoinDesk interview as a possibility for 2027.
An account regime changes when gains are assessed
The investment-account approach focuses on money taken out compared with money put in. Reinvesting proceeds inside an eligible arrangement and withdrawing them for use elsewhere are therefore different stages for the tax calculation.
That does not make crypto gains generally tax-free. Nor does it establish that every wallet or exchange account automatically qualifies. The provider requirements and implementation rules are important to determining how the regime will work in practice.
Parliament says the cabinet must issue rules for providers by December 30, 2026. The vote establishes the legislative change, while those operational requirements remain relevant to how a taxpayer can actually use the account service.
A declaration window with conditions
The one-time mechanism uses the market value of declared assets on December 31, 2026 and a 10% tax rate. That declared value would become the acquisition value used for later tax calculations.
The parliamentary announcement covers holdings at EU-licensed providers and addresses controlled by individuals themselves. It excludes people already subject to specified criminal, tax-audit, tax-control or administrative proceedings involving crypto income.
Declarations may be filed from April 1 through May 31, 2027, with one correction permitted through June 30. The payment deadline is July 23. Those conditions mean the route should not be described as an unconditional amnesty available to every holder.
The cost-basis provision is economically important. Establishing a recognized acquisition value addresses a different problem from simply observing the current balance: a later gain depends on both the disposal value and the relevant starting cost.
Paying taxes in crypto remains a separate project
The proposed payment route concerns how a bill could be settled, rather than how the bill is calculated. The adviser said work with a payment provider remained, and did not identify the provider or eligible cryptocurrencies. A possible 2027 introduction is not confirmation that the service is operating.
Similarly, tax transparency and tax liability should not be collapsed into the same policy. Our report on Australia's proposed crypto reporting framework concerns information supplied to tax authorities, rather than Latvia's choice of when account withdrawals become taxable.
For Latvia, the concrete development is parliament's approval of the account and declaration changes. Implementation details and the separate crypto-payment plan will determine how that policy reaches users, without changing the distinction between calculating a tax obligation and choosing a way to pay it.