Crypto Tax in Latvia (2026): Rates, Rules & How to Declare

This guide pulls together what an individual in Latvia needs to know about crypto tax in 2026 — when tax actually arises, how much it is, how and when you declare it, and what changes under the new EU rules. It’s the overview; specific steps link out to separate articles.

Nothing on this page is individual tax or legal advice. It’s a general, publicly available overview — not a document to rely on in a unique situation. For advice, see our services.

In short

• Tax only arises when crypto is converted to euro (or another fiat currency). A crypto-to-crypto swap on its own does not create a tax liability.
• Rate: income from selling crypto is generally treated as a capital gain and subject to personal income tax (PIT); the 2026 PIT rate on capital gains is 25.5%.
• Threshold: if your income in a quarter exceeds €1,000, you declare quarterly; otherwise once a year.
• Record retention: at least 3 years.
• New in 2026 — DAC8: from 1 January 2026, EU crypto-asset service providers report client transactions to the State Revenue Service (VID). The first report is due by 30 June 2027.

1. When a tax liability arises

Crypto tax in Latvia follows capital-gains logic — similar to shares or other investments. The liability arises at the moment a taxable transaction occurs, not on transfers or while holding.

A taxable event (transaction) is:

• selling crypto for euro or another fiat currency;
• using crypto to buy goods or a service (because that, too, is an actual disposal);
• other situations where crypto is converted into money or money-equivalent value.

Not a taxable event (under the current VID position):

• a crypto-to-crypto swap (e.g. BTC for ETH);
• a transfer between your own wallets;
• simply holding.

Specific cases (staking rewards, airdrops, DeFi income and NFT transactions) are more complex. We cover them below and in a separate staking/airdrop/DeFi article.

2. How much is the tax

Capital gains from crypto in Latvia are subject to personal income tax (PIT). The 2026 PIT rate on capital gains is 25.5%.

The gain is the sale price minus the acquisition cost and allowable expenses (e.g. exchange fees). If a disposal produces a loss, it can to some extent be set against other capital gains — but not against salary or other income.

Worked example

Suppose in January 2025 you bought 0.5 BTC for €15,000 (€30,000 per BTC) and in April 2026 you sell it for €25,000 (€50,000 per BTC), paying €100 in exchange fees.

• Sale proceeds: €25,000
• Less acquisition cost: €15,000
• Less fees: €100
• Capital gain: €9,900
• PIT (at 25.5%): €2,524.50

3. How you declare

Declaration goes through the State Revenue Service’s Electronic Declaration System (EDS). A detailed step-by-step guide is in a separate article: How to declare crypto income in EDS.

In short:

1. In EDS you choose the relevant declaration type — annual or quarterly, depending on volume (see section 4);
2. Enter income from the disposal of capital assets;
3. Add the acquisition cost and allowable expenses;
4. The system calculates the PIT due.

4. Quarter or year? The €1,000 threshold

Whether you declare quarterly or annually depends on the volume of capital-asset disposal income in the quarter.

• If income from capital assets in a quarter (including crypto sold for euro) exceeds €1,000, you declare for that quarter — by the 15th of the following month.
• If income in a quarter does not exceed €1,000, you can declare once a year, with the annual income return.

An important nuance: the threshold applies to income, not the gain. So even a break-even transaction can trigger a quarterly declaration if turnover is high.

5. Special cases

Staking

Staking rewards are currently not clearly regulated in separate VID guidance in Latvia. Two approaches are discussed in practice: (a) treat the reward as economic-activity / other income at the moment it’s received, at its euro market value; (b) treat the reward as crypto “acquired” at that value as the cost base, with tax arising later — on sale.

Airdrops

Airdrops are most often received without any financial outlay, so the entire amount would, on sale, be taxable as a capital gain.

DeFi (liquidity provision, lending)

DeFi transactions have no separate tax regime. Each transaction is analysed by its economic substance — whether an asset is disposed of, whether it’s a lending operation, and so on. This crypto and web3 area carries the greatest uncertainty, and individual advice is most strongly recommended here.

NFTs

Selling an NFT for fiat or for other crypto follows the same capital-gains logic as selling other crypto-assets. An artist’s direct NFT issuance, however, may be classified differently (economic activity).

6. Fraud and losses

If crypto is lost to fraud (an exchange collapse, a “rug pull”, phishing), tax losses are not recognised automatically. To use the loss, you generally need to document: (a) the original acquisition, (b) the fact of the loss (a police report, the exchange’s notice, on-chain evidence), (c) that recovery is impossible.

7. What changes in 2026: DAC8

From 1 January 2026, the EU directive DAC8 is in force, extending automatic information exchange to crypto-asset service providers.

In practice this means:

• EU exchanges and service providers (CASPs) collect and pass on client identification data and transaction summaries to the tax administration of the member state where the client is resident;
• the first reporting deadline is 30 June 2027 for the 2026 calendar year;
• VID will thereby obtain a structured view of crypto transactions that has so far been hard to see.

In practical terms it reinforces the already-existing duty to declare — the risk of non-declaration rises. There’s a detailed DAC8 explainer in a separate article.

8. Frequently asked questions

Does a crypto-to-crypto swap create tax? On the current VID position — no. Tax arises only when there’s a conversion to euro or another fiat.

How long must I keep transaction history? At least 3 years.

Do I have to declare if annual sale proceeds are under €1,000? The threshold applies per quarter — if it isn’t exceeded in any quarter, you declare once a year. A full exemption from the duty to declare is to be checked separately where turnover is minimal.

Can losses be set against salary? No. Capital losses can only be set against other capital gains.

What if crypto is received by inheritance or gift? Inheritance and certain gifts (to relatives) are exempt from PIT. However, a later sale raises a capital-gains question, and the acquisition cost is determined under special rules.

9. When to talk to a lawyer

This overview is informational and applies to general situations. It isn’t enough if:

• there are several exchanges, wallets and years, with discrepancies between them;
• there are large volumes or a large net gain;
• there’s staking, DeFi or other modern-product income;
• there’s an international element (change of residence, a foreign exchange, an OTC deal);
• VID has asked a question or opened a review.

In those cases it’s worth structuring the situation before you file, not after.

DONE offers crypto tax advice to individuals and businesses in Latvia and the EU. There’s more on how an engagement works on our crypto lawyer in Latvia page.

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Updated: 2 June 2026.