Latvia passes crypto withdrawal tax law, plans crypto tax payments
Latvia's parliament has approved a law to tax crypto withdrawals above deposits rather than each trade, with a one-time declaration to settle older gains, CoinDesk and Odaily report.
Why it matters: Latvia is replacing per-trade crypto tax with a withdrawal rule and a 10% settlement route, which could make compliance simpler for holders.
Reviewed and fact-checked by Jayshree Majumdar on 18 Oct 2026
In short
- Latvia's parliament passed a law on 15 October 2026 to tax crypto withdrawals once they exceed deposits, rather than each trade.
- The law takes effect in 2027 and adds a one-time declaration, with tax due by 23 July, according to Odaily and CoinDesk.
- Prime ministerial adviser Didzis Dejus told CoinDesk residents could pay personal taxes in crypto next year, pending technical work.
- Prime Minister Andris Kulbergs' United List won the 3 October election but still needs coalition partners before any payment plan is final.
Latvia's parliament passed a law on 15 October 2026 that will tax crypto investment withdrawals once they exceed the amount a holder deposited, rather than taxing every trade, according to CoinDesk. The law takes effect in 2027, according to Odaily, and adds a one-time declaration mechanism for people who bought crypto years ago and no longer have records of what they paid.
Why Latvia is doing this
Latvia has been trying to attract crypto companies and investors and position itself as a fast-moving fintech hub. The plan builds on announcements made in May 2025 to allow crypto tax payments and tokenise assets such as real estate, part of an effort to attract crypto business beyond licensing, CoinDesk reported.
How the withdrawal tax works
Under the new rules, tax is calculated on withdrawals from a crypto investment account only when the total withdrawn is more than the total paid in. Individual crypto-to-crypto trades are not taxed on their own. For past obligations, holders can declare assets from 1 April to 31 May 2027 and pay 10% of the declared assets' market value at the end of 2026, with the tax due by 23 July, CoinDesk reported.
Who the one-time declaration helps
The change matters most for long-term holders. Didzis Dejus, an adviser to Latvia's prime minister on strategic planning and the new economy, said the measure should help people who bought crypto years ago but lack records to prove their purchase price. The 10% declaration gives those holders a one-off way to clear old tax exposure without reconstructing every historical trade, CoinDesk reported.
Can residents pay taxes in crypto?
Separately, Latvia could allow residents to pay personal taxes in cryptocurrency as early as next year. The Finance Ministry has agreed to the plan, though technical work with a payment provider remains, Dejus told CoinDesk at the UN:BLOCK Fintech conference in Riga. Asked whether Latvians would be able to pay taxes in crypto during the prime minister's term, he said: 'I believe that will take place next year.' He added, 'We are not afraid to be the fastest country.'
What the next coalition must decide
The timing of the payment plan could depend on Latvia's next government. Prime Minister Andris Kulbergs' United List won the 3 October parliamentary election and is expected to be renominated, but still needs coalition partners. The withdrawal tax law is already passed, while the crypto payment option still waits on technical work, according to CoinDesk.
Questions readers ask
What does Latvia's new crypto tax law change?
From 2027, Latvia taxes crypto investment withdrawals once they exceed the amount a holder deposited, not each trade. A one-time declaration lets holders settle past obligations by paying 10% of their declared assets' market value at the end of 2026, with declarations open from 1 April to 31 May 2027 and tax due by 23 July.
When can Latvians pay taxes with cryptocurrency?
Didzis Dejus, an adviser to Latvia's prime minister, told CoinDesk he believes residents will be able to pay personal taxes in cryptocurrency next year, after Finance Ministry agreement and technical work with a payment provider. The plan is separate from the withdrawal tax law.
Does Latvia's law tax crypto-to-crypto trades?
No. The new law taxes withdrawals above deposited amounts rather than individual trades, so crypto-to-crypto trades are not taxed on their own under the withdrawal rule, according to CoinDesk.
Our view
Latvia's vote is another sign that crypto is moving into ordinary tax systems. A law that taxes withdrawals above deposits, rather than each trade, makes compliance practical for holders, and the 10% one-time declaration offers a route out of uncertain past obligations. That is the kind of regulatory clarity that lets people participate without fearing every swap creates a taxable event.
The promise of paying taxes in cryptocurrency is still conditional on technical work and a coalition government, so it should not be treated as settled. The test will be whether the next government keeps the 2027 timetable and whether other European states follow with similar withdrawal-based models. I see Latvia's move as one more signal that formal treatment of crypto is coming sooner than its critics expect.
Follow the latest Regulation updates as they happen on Regulation NewsFeeds.
What to watch: The one-time declaration window opens on 1 April 2027, with tax due by 23 July, while a new coalition must decide the crypto payment plan.
Sources
Live updates on NewsFeeds:RegulationBy Keshav Aggarwal
Disclosure: Keshav Aggarwal holds small amounts of crypto as long-term investments. He does not trade any asset he writes about within 24 hours of a story, and is not paid by any company covered on this site, updated 6 October 2026. Our holdings and trading policy.
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