๐ Description
In Latvia, cryptocurrency taxation is precisely regulated by the State Revenue Service (VID - Valsts ieลฤmumu dienests). Cryptocurrencies are considered "capital assets."
Latvia stands out due to two major elements: the absence of taxation on crypto-to-crypto exchanges, and a filing schedule that changes based on the amount of your profits. This guide explains the Latvian legislation in force and how to use Waltio to generate the key figures for your declaration.
Latvia Tax Essentials
Category | Tax Rule |
Global Tax Rate | 25.5% (Tax on capital income) |
Crypto-to-Crypto Exchanges | Non-taxable (Tax deferral) |
Loss Offsetting | Yes (Deductible from crypto gains of the year) |
Calculation Method | FIFO (First-In, First-Out) |
Filing Deadline | Variable (Quarterly or Annual depending on gains) |
Calculation and Tax Rate: The 25.5% Rate
Following the tax reforms that took effect in 2025/2026, net gains (Selling Price - Purchase Price - Fees) realized from the sale of cryptocurrencies are subject to Personal Income Tax (PIT).
The Rate: The tax rate on capital gains is fixed at 25.5% (replacing the previous 20% rate).
Loss Management: The Latvian system is fair on this point. You are required to consolidate your annual gains and losses. If you realize capital losses, they can be deducted from your gains in the same category to reduce your overall tax for the year.
๐ Crypto-to-Crypto Operations (Trading)
A huge advantage of Latvia for traders is that the VID has formally confirmed that exchanging one cryptocurrency for another is not a taxable event. Trading Bitcoin for Ethereum or USDT triggers no tax. The tax is paused (tax deferral) until you convert your assets into Euros.
โ๏ธ How to set up these operations on Waltio?
To fully benefit from this advantageous system, you must adjust your Waltio account configuration.
By default, Waltio considers Crypto-to-Crypto exchanges as taxable to align with global European standards.
Your Action: So that your report reflects Latvian tax neutrality, you must change the status of your Crypto-to-Crypto exchange operations to "Non-taxable".
The Advantage: The tool will not calculate any immediate capital gain during your swaps. It will carry forward the initial acquisition date and cost of your tokens until your final exit into fiat currency, ensuring a perfect calculation of your capital gain at 25.5%.
๐ Passive Income (Staking, Mining, Airdrops)
In Latvia, receiving tokens from airdrops or staking rewards is generally considered a taxable event if there is a clear value contribution, but in practice, tax is most often required at the time of conversion to Fiat. If it is a significant mining activity, it may be reclassified as economic activity (requiring specific registration).
โ๏ธ How are they managed on Waltio?
For individual investors, Waltio's default deferral methodology is the most suitable:
Passive income is marked as non-taxable upon receipt.
The software assigns them an acquisition value of โฌ0.
Practical Consequence: Taxation is deferred. The tax event is only triggered when you sell these tokens for Euros. The entire disposal amount will then be considered a net profit and taxed at 25.5%.
โ What Triggers Tax (Crypto โ Fiat)
A "disposal" occurs during the following events:
Sale for currencies: Converting your cryptos into Euros (EUR), Dollars (USD), etc. Income is considered received on the day the fiat currency arrives in your account (platform or bank).
Purchase of a good or service: Paying for a good with your cryptocurrencies is equivalent to a sale of the asset, triggering the tax on the latent capital gain.
๐ Filing:
This is the great peculiarity of Latvia. Your declaration obligations to the EDS (the VID's electronic filing system) depend on the amount of your gains during a given quarter:
If your gains exceed โฌ1,000 in a quarter: You must submit a capital income return on a quarterly basis. The declaration must be sent no later than the 15th day of the month following the end of the quarter, and the 25.5% tax must be paid before the 23rd day of that same month.
If your gains do not exceed โฌ1,000 in the quarter: You move to an annual rhythm. You must submit your return for the entire year no later than January 15 of the following year and pay the calculated tax before January 23.
In both cases, the VID requires you to keep all your supporting documents (exchange histories, prices, dates) for at least 5 years. The complete export provided by Waltio is therefore an essential document for your compliance.
Disclaimer: This guide is provided for informational and educational purposes only. Latvian legislation has recently evolved (notably with the rate increase to 25.5%) and strictly distinguishes private investment from economic activity (which requires self-employed status). Waltio does not provide tax or legal advice. We strongly recommend consulting an accountant or a certified tax advisor in Latvia to validate your filing frequency (quarterly or annual).