The development of the crypto-asset market is also changing tax regulation. On 15 October 2026, the Saeima adopted amendments to the Law on Personal Income Tax, which were published on 22 October in the official gazette Latvijas Vēstnesis No. 204 (official publication No. 2026/204.4) and entered into force on 23 October. The amendments introduce two significant changes: the application of the investment account regime to crypto-assets and a one-time voluntary declaration of crypto-assets which, subject to the conditions laid down by law, will make it possible to settle previous personal income tax (PIT) obligations related to them. What do these changes mean for crypto-asset holders, and what should be assessed before making use of the new procedure?
- Why was the regulatory framework changed?
The previous investment account regulatory framework was intended for transactions involving monetary funds and financial instruments. Crypto-assets that did not meet the definition of financial instruments were not covered by this regime. As a result, their holders did not have access to the same tax payment deferral options as investors carrying out transactions in securities through an investment account. At the same time, for some crypto-asset holders, settling historical tax obligations is complicated by incomplete transaction records. The explanatory memorandum to the draft law points to situations in which platforms previously used have ceased operating, acquisition documents have not been retained, or transactions have been carried out directly between individuals without centralised record-keeping.
Evidence of acquisition cost is essential. If this value cannot be substantiated, it may be treated as zero for tax calculation purposes, meaning that the taxable capital gain may equal the entire amount of the sale proceeds. The one-time declaration mechanism offers an opportunity to settle historical PIT obligations to the extent provided for by law and to determine the acquisition cost of declared assets for future transactions.
- Investment account also applicable to transactions involving crypto-assets
The basic principle of the investment account regime is the deferral of tax payment: taxable income arises when the amount withdrawn from the account exceeds the amount paid into it, subject to the adjustments provided for by law. Funds acquired within the account can be reinvested without calculating tax on each individual sale transaction.
Example. An individual deposits EUR 10,000 into an investment account. As a result of transactions, the value of the account increases to EUR 15,000. As long as the funds remain in the account and are reinvested, this increase does not in itself give rise to a tax payment obligation. If the individual withdraws EUR 12,000, in a simplified scenario the taxable income is EUR 2,000, representing the difference between the amount withdrawn and the amount deposited.
However, an ordinary account on a crypto-asset platform does not automatically become an investment account. The requirements laid down by law must be met, including the submission of information to the State Revenue Service (SRS) regarding the account’s designation as an investment account. The crypto-asset service provider must have obtained an authorisation in accordance with the MiCA Regulation and comply with the requirements established by the Cabinet of Ministers. The relevant regulations must be issued by the Cabinet of Ministers by 30 December 2026. Therefore, before using the regime, it is necessary to verify whether the specific service provider meets the requirements and can provide an investment account service.
- One-time declaration subject to a 10% tax
Latvian tax residents are given the opportunity to voluntarily declare crypto-assets owned by them which, on 31 December 2026, are held:
in an account with a crypto-asset service provider registered in the European Union and authorised in accordance with the MiCA Regulation, or at a self-hosted crypto-address controlled by the individual, subject to the restrictions laid down by law.
A 10% tax will apply to the declared assets based on their market value as at 31 December 2026. This value is determined using the average price over a six-month period on a crypto-asset trading platform compliant with the MiCA Regulation. Following the submission of the declaration and payment of the tax, the individual will be deemed to have fulfilled the PIT declaration and payment requirements in respect of the declared crypto-assets and the income used for their acquisition or exchange for the period up to 31 December 2026. The declared market value on which tax has been paid will become the initial acquisition cost of the relevant crypto-assets for the purpose of calculating future capital gains.
- What does “tax amnesty” mean in this case?
In public discourse, the one-time declaration mechanism is sometimes referred to as a tax amnesty. In its information material dated 26 October 2026, the SRS explains that, in respect of the declared crypto-assets and the income used for their acquisition or exchange, an exemption is provided from late payment charges and from administrative and criminal liability associated with the relevant violations of declaration and tax payment requirements. However, this opportunity does not mean that all of an individual’s tax obligations are extinguished or that funds of any origin are legalised. The conditions and restrictions laid down by law must be observed for it to apply. The special procedure will not be available to individuals against whom, on the date of submission of the declaration, any of the following proceedings have already been initiated in connection with income from crypto-assets:
- criminal proceedings for evasion of taxes and equivalent payments;
- an SRS tax audit or tax control;
- administrative offence proceedings for tax non-payment or a violation of tax declaration requirements.
The restriction also applies to individuals who, while holding crypto-assets, were required to submit, or who submit, a public official’s declaration in accordance with the procedure laid down by law. Likewise, the special declaration procedure is not a means of laundering proceeds of crime.
- 10% of the value of assets or 25.5% of the profit — different tax calculations
Under the general procedure, income from the disposal of crypto-assets is subject to PIT at a rate of 25.5% on the difference between the sale price and the substantiated acquisition cost, taking into account attributable acquisition expenses. Depending on total annual income, an additional rate of 3% may also apply to the portion of income exceeding EUR 200,000, as specified by law. In the case of the one-time declaration, however, the 10% tax is calculated on the market value of the declared assets, rather than on the profit. Therefore, a lower tax rate does not in itself mean a lower payment.
Example. If the value of the crypto-assets included in a one-time declaration is EUR 50,000, the tax is EUR 5,000. This EUR 50,000 becomes the acquisition cost of the assets. If they are subsequently sold outside an investment account for EUR 60,000, the capital gain, without taking into account any other attributable expenses, is EUR 10,000.
This is a special opportunity to settle historical obligations, not an ongoing option to apply a 10% rate to any sale transaction. Before making use of it, the transaction history, documented acquisition costs and previously fulfilled tax obligations should be assessed.* *It should also be taken into account that, outside an investment account, the exchange of crypto-assets for other crypto-assets without receiving any other consideration does not necessarily give rise to an immediate taxable event under the existing procedure either. Therefore, it would not be accurate to explain the benefits of the new regime by claiming that previously tax was always payable after every exchange of crypto-assets for other crypto-assets.
- Broader exchange of information on crypto-assets
The changes in Latvia are taking place alongside the expansion of international tax transparency requirements. The EU Directive DAC8 provides for the collection of information on crypto-asset transactions starting from 2026, and the first exchange of information between the tax administrations of Member States by 30 September 2027.* *The MiCA regulatory framework establishes requirements for the crypto-asset market and the activities of service providers, while DAC8 expands the exchange of tax information. The 10% declaration mechanism introduced by Latvia is a separate national tax policy measure — this rate is not required by EU regulation.
- Declaration and payment deadlines
| Action | Deadline |
|---|---|
| Date on which ownership and holding of assets are assessed | 31 December 2026 |
| Submission of the one-time crypto-asset declaration | From 1 April to 31 May 2027 |
| One-time correction of the declaration | By 30 June 2027 |
| Payment of tax into the unified tax account | By 23 July 2027 |
- What is recommended to do now?
Crypto-asset holders are advised to compile platform statements, wallet addresses, transaction histories, acquisition documents and previously submitted tax declarations. They should also verify the status of the service provider used and assess whether any restrictions on the special declaration procedure apply to them.
The INNOVATOR team can assist in assessing tax obligations related to crypto-assets, the suitability of the one-time declaration procedure and the conditions for using the investment account regime.
Sources:
1. Amendments to the Law on Personal Income Tax.
2.Likumprojekta Nr. 1522/Lp14 materiāli un anotācija.
3. SRS information material “Crypto-assets in an investment account and voluntary one-time declaration of crypto-assets”, 26 October 2026.
4. SRS explanation “Activities of individuals involving crypto-assets”.
5. European Commission explanation on DAC8.
©INNOVATOR 04.11.2026.