Latvia’s Saeima Adopts Withdrawal-Based Crypto Tax Model With One-Time 10% Declaration Window

Latvia’s parliament has adopted crypto tax amendments that tax investment accounts only when withdrawals exceed deposits, and created a one-time window to declare holdings at a flat 10%.

The Saeima approved the urgent amendments to the Law ‘On Personal Income Tax’ on October 15, 2026. Under the new investment-account model, tax applies only when money taken out of an account exceeds the amounts originally put in. Individual trades inside the account are not taxed one by one, aligning crypto with how most securities accounts are treated.

The accounts will be available only through EU-licensed crypto-asset service providers operating under the EU’s MiCA framework, so the provider, not just the taxpayer, has to sit inside the bloc’s licensing regime. The changes also line up with DAC8, the EU directive for automatic exchange of crypto tax information between member-state authorities, which ties Latvia’s regime to bloc-wide transparency. The model matters for active traders in particular: under a trade-by-trade system every disposal is a taxable event, while the withdrawal approach defers tax until money leaves the account.

The law also creates a single declaration opportunity. Individuals can declare crypto held as of December 31, 2026, and settle past tax obligations at 10% of the market value on that date. Both assets held with EU-licensed CASPs and coins in self-custodied addresses qualify. Declarations can be filed between April 1 and May 31, 2027, with one correction allowed until June 30, 2027, and payment is due by July 23, 2027 into the unified tax account. People already facing tax proceedings tied to crypto income cannot use the new provisions.

The declaration window is meant for holders who bought crypto years ago and lack records to prove what they paid, Didzis Dejus, adviser to the prime minister on strategic planning and the new economy, said at the UN:BLOCK Fintech conference in Riga. He told the conference that Latvia is competing to attract crypto firms beyond licensing and said, “We are not afraid to be the fastest country.” Dejus also said the Finance Ministry has agreed in principle to a plan that would let residents pay personal taxes in cryptocurrency as early as 2027, though technical work with a payment provider remains and no provider or qualifying cryptocurrencies have been named.

The law is not yet operational. The Cabinet of Ministers is expected to issue supporting regulations by December 30, 2026, which may still alter mechanics and deadlines. Timing of the crypto tax-payment plan may additionally depend on the next coalition government, since Prime Minister Andris Kulbergs’ United List won the October 3, 2026 election but still needs coalition partners.