Latvia shifts crypto taxation to withdrawal-based system, aims to start collections in 2027
Parliament approved a law taxing cryptocurrency withdrawals that exceed deposits and introduced a one-time declaration mechanism, with tax payments targeted to begin in 2027.
Latvia’s parliament has approved a law that changes how cryptocurrency activity is taxed, moving away from taxing individual trades and instead applying tax to crypto withdrawals that exceed deposits. The legislation also establishes a one-time declaration mechanism. Authorities are targeting the start of crypto tax payments in 2027.
Under the new framework, taxable events are triggered when a taxpayer withdraws crypto in an amount that surpasses their cumulative deposits, rather than when each trade is executed. The law includes a one-off declaration step intended to accompany the transition to the withdrawal-based approach.
The passage of the law was confirmed in reporting on October 18, 2026. The measure was set by parliament and is designed to change the basis on which gains from crypto activity are identified for taxation.
Brief background
The principal change replaces a trade-by-trade tax assessment with a system that focuses on net withdrawals relative to deposits. The one-time declaration mechanism is part of the law as passed and will be implemented alongside the new tax basis.
WHAT THIS MEANS
ANALYSISIn practical terms, the reform shifts the moment when many crypto holders may face a tax obligation: taxpayers will generally owe tax when they withdraw more than they previously deposited, rather than on each individual transaction. The government’s aim to begin collections in 2027 gives households, businesses and service providers time to adapt to reporting and compliance requirements under the new rules. How authorities will operationalize the one-time declaration and administrative processes will determine how straightforward the transition is for holders and platforms; those implementation details were not specified in the reported material.
This section is analysis based on the reported facts and is not a claim of additional undisclosed events.
HashFirstGlobal News reports are prepared from publicly available source material.