Latvia's parliament approved a change to how crypto investment accounts are taxed on October 15, moving the charge from individual trades to net account withdrawals. Under the new rules, qualifying withdrawals above the amount originally deposited are taxed, while swaps between crypto assets inside the account no longer create an automatic tax event. The law also opens a one-time declaration window for holders to regularize historical positions at a 10% charge based on value at the end of 2026.
What the new tax base actually covers
The shift is a structural one. Instead of taxing each disposal as it happens, the law looks at the account as a whole and taxes what comes out above what went in. That means moving between bitcoin, ether, or other assets inside the investment account won't by itself trigger a tax bill. The taxable moment arrives on withdrawal, and only on the amount that exceeds deposits.
Investors still have to keep records establishing both sides of that equation. Deposits and withdrawals need to be documented, so the burden of proof hasn't disappeared — it's just been repositioned toward the account ledger rather than a trade-by-trade log.
The amnesty window and its deadlines
The one-time declaration mechanism is aimed at people who hold older crypto positions and want to bring them into the system. The charge is 10%, calculated on the value of those positions at the end of 2026. Applications are scheduled to run from April 1 through May 31, 2027, with payment due by July 23, 2027.
That gives holders a defined stretch to file and a separate deadline to settle. The sequencing matters: filing and paying are not the same event, and the July date is the one that closes the process.
Paying tax in crypto is still just a proposal
Latvia is also considering letting taxpayers settle their bills in cryptocurrency, potentially from 2027. But that idea hasn't been fleshed out. The currencies that would be accepted, the provider that would handle conversions, and the operational arrangements around the whole thing have not been announced. For now, it's a proposal on the table, not a working payment channel.
That gap is worth flagging because the timeline overlaps with the amnesty payment deadline. Anyone planning to use crypto to pay the 10% charge has no confirmed mechanism yet.
Why the account model is spreading
Latvia's move fits a broader pattern across the EU, where governments are trying to apply old tax concepts to assets that can be exchanged continuously and instantly. The trade-by-trade approach struggles when a user can flip between tokens inside a single platform without ever touching a bank account. Taxing the net outflow is an attempt to make the rule workable without tracking every internal swap.
The trade-off is that the record-keeping obligation lands on the investor, and the valuation date for historical positions is fixed at the end of 2026 — a number that will be set before the declaration window even opens.
The next concrete step is the April 1, 2027 opening of applications. Until then, the outstanding question is whether the crypto-payment proposal gets detailed in time to matter for the July 23 payment deadline.
