Latvia's parliament, the Saeima, on October 15, 2026, adopted urgent amendments to the Law "On Personal Income Tax" that overhaul how the country taxes crypto-assets and establish a one-time declaration window in 2027. The centerpiece of the package is a flat 10% tax on declared holdings.

How the declaration window works

Individuals will have a single opportunity to declare crypto assets they hold as of December 31, 2026. The 10% rate applies to the market value of those assets on that date.

The scheme covers two categories of storage. Assets held in accounts with EU-licensed Asset Service Providers (CASPs) qualify, as do coins held in self-custodied addresses. Because self-custodied addresses qualify, eligibility does not hinge on having held the assets through an exchange or other intermediary.

The timeline is tight but clearly defined:

• Declaration period: April 1 to May 31, 2027
• Amendment deadline: one correction permitted until June 30, 2027
• Payment deadline: July 23, 2027, paid into the unified tax account

One notable exclusion applies: people already facing proceedings over tax issues tied to crypto income cannot use the new provisions.

An investment account for crypto

The second major change targets how crypto is taxed going forward. The amendments permit an investment-account model for crypto-assets, under which tax becomes due only when withdrawals from the account exceed the amounts originally invested. Individual trades inside the account are not taxed one by one. The structure mirrors the investment-account regime Latvia's tax code already applies to traditional securities, extended here to crypto.

These accounts will be available through EU-licensed crypto-asset service providers operating under the Markets in Crypto-Assets regulation, better known as MiCA — the European Union's framework for licensing and supervising crypto firms. Because a MiCA license issued in one member state is valid across the bloc, Latvian residents could access such accounts through providers authorized anywhere in the EU, not only firms licensed in Latvia.

Background: DAC8 and Latvia's push for crypto firms

The changes align with the EU's DAC8 directive — the eighth Directive on Administrative Cooperation — which is designed for automatic exchange of information between tax authorities and aims to improve transparency and compliance in crypto. Its reporting obligations begin applying across the EU in 2026 — the same year as the December 31 snapshot that anchors the declaration window.

The new framework also follows earlier efforts by Latvia to court foreign crypto businesses. The country waived a 3% levy for non-residents for the period from 2025 to 2027.

The legislation is not fully operational yet. The Cabinet of Ministers is expected to issue supporting regulations by December 30, 2026, to make implementation work. Those rules will set the operational details of both the declaration window and the investment-account regime.

What this means for holders and crypto firms

For Latvian residents with undeclared crypto, the math is relatively straightforward. A flat 10% on market value as of a fixed date offers certainty. The trade-off is that the rate applies to current market value rather than historical cost. Someone who bought early and sits on large unrealized gains may find 10% of today's value attractive, while someone who bought near a peak may weigh the option differently.

The snapshot date also adds a timing element. Because market value on December 31, 2026, sets the tax base, price swings before year-end will directly shape what declarants owe.

For crypto firms, the MiCA link is the bigger story, as the investment-account model can only be offered by EU-licensed providers. With MiCA licensing and DAC8 reporting set at the EU level, the core rules for Latvian crypto users are increasingly written at EU level, with national tax rules layered on top.

Key dates to track include December 30, 2026, for the Cabinet regulations; the April 1, 2027, opening of declarations; and the July 23, 2027, payment deadline.