Latvia is considering allowing residents to pay personal income taxes with cryptocurrency beginning in 2027, according to Didzis Dejus, an adviser to the prime minister on strategic planning and the new economy. The Finance Ministry has agreed to the plan in principle, though technical implementation with a payment provider is still underway.
The initiative is part of a broader effort to position Latvia as an attractive destination for crypto businesses and investors. A similar proposal was announced in May 2025 to enable crypto tax payments and asset tokenization for items like real estate.
Crypto Tax Overhaul
On October 15, Latvia's parliament passed legislation significantly revamping how the country taxes cryptocurrency investments. The new law taxes withdrawals from crypto accounts once they exceed the amount originally deposited, rather than taxing individual trades.
The legislation also introduces a one-time declaration mechanism to address historical tax obligations. Crypto holders can settle past taxes by paying 10% of their declared assets' market value as of the end of 2026. The declaration period runs from April 1 to May 31, 2027, with taxes due by July 23.
According to Dejus, this approach benefits individuals who purchased cryptocurrency years ago but lack adequate transaction records to calculate their tax basis.
International Context
Latvia would not be the first jurisdiction to accept digital assets for tax payments. Colorado began allowing residents to pay taxes in cryptocurrency through PayPal in 2022, with proceeds converted to dollars.
The timeline for Latvia's implementation may depend on the formation of the next government. Prime Minister Andris Kulbergs' United List won parliamentary elections on October 3 and is expected to be renominated, though it still requires coalition partners to form a government.
