For an individual investing on their own behalf, Latvia generally taxes a positive gain when a crypto-asset is disposed of for money, goods or services. Calculate the gain by subtracting the allocated acquisition cost and directly related acquisition expenses from the disposal proceeds. Buying crypto alone is not reported as a disposal.
The filing route is the State Revenue Service (VID/SRS) Electronic Declaration System (EDS), using the DK form, Pārskata perioda deklarācija par ienākumu no kapitāla pieauguma, with income code K for a crypto-asset transaction. The timing depends on whether your total capital-asset transaction income in a quarter exceeds EUR 1,000.
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Latvia’s crypto-tax rules at a glance
| Question | Rule for a private individual |
|---|---|
| What is taxed? | A positive realized capital gain from disposing of a crypto-asset. |
| Basic calculation | Disposal price minus allocated acquisition value minus directly related acquisition expenses. |
| Personal income-tax rate | 25.5% for income from 2025 onward; the previous rate was 20%. |
| Additional annual charge | 3% on the portion of total annual income above EUR 200,000, assessed through the annual return. |
| Return | DK, Pārskata perioda deklarācija par ienākumu no kapitāla pieauguma. |
| Crypto income code | K. |
| Submission channel | VID/SRS Electronic Declaration System (EDS). |
| Evidence retention | Keep purchase, transfer and sale evidence for at least five years. |
These rules describe the ordinary private-investor case. Mining, providing crypto services to other people, compensation paid in crypto and several token categories require separate classification before you calculate tax.
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First decide whether you are a private investor
The capital-gains method is designed for an individual who buys and sells crypto for their own account. It is not an automatic answer for every activity involving virtual currency.
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Personal buying and selling
If you buy crypto with your own funds and later dispose of it, the resulting positive difference is generally income from capital growth. The purchase itself is not entered on the annual income return or on the capital-gains return.
Mining and crypto services
SRS treats mining or creating virtual currency, and providing crypto trading or other crypto services to other people, as economic activity. Those activities require registration and business-income treatment rather than automatically using the private-investor capital-gain approach. Keep business activity separate from your personal investment ledger so that receipts, costs and declarations do not get mixed.
VAT position
Ordinary buying and selling of crypto by itself is generally not subject to VAT, and a person who only buys and sells crypto normally does not have to register for VAT on that basis. If you carry out other VAT-taxable activities, the value of crypto transactions is included when checking the EUR 50,000 VAT-registration threshold. A separate VAT trigger can therefore arise even when the crypto trades themselves are not VAT-taxable.
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Sale for euros or another official currency
A fiat sale is realized when you receive the money. Use the amount received as the disposal price, converted to euros where necessary, and match it to the portion of the crypto you sold.
Crypto-to-crypto exchange
An exchange of one crypto-asset for another, with no money, goods or services involved, is not treated under the SRS guidance as realized sale income at the moment of the swap. Realization occurs when the crypto received in the exchange is later disposed of for money, goods or services. Preserve the exchange record and wallet trail so you can establish what was received and when it is eventually disposed of.
Payment for goods or services
If you use crypto to pay for goods or services, the disposal is a realization event. The value of what you provide and receive must be supported by contemporaneous records. Crypto received as payment is different from crypto bought as an investment: declare the receipt according to the time and economic nature of that income.
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Crypto received as another type of income
When crypto is received for work, services, compensation or another income source, declare that receipt under the applicable income category rather than treating the entire receipt as a later investment purchase. SRS gives receipt of USDT in certain MiCA-related transactions as an example: value it at its euro market value on the date received and apply the rules for the underlying income.
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Buying, holding and transferring
Buying crypto, holding it while its market price changes, and moving it between wallets you control do not by themselves create a disposal income entry. Keep transfer records because an exchange export may otherwise make a wallet movement look like a sale.
Losses and break-even disposals
If the disposal price equals or is below the acquisition value allocated to the portion sold, no disposal income arises under the SRS guidance. That transaction is not declared as crypto disposal income on the DK return. Retain the calculation and evidence in case SRS asks how you reached the result.
Calculate each positive gain
Use this formula for every disposal that produces a positive result:
Capital gain = disposal price − allocated acquisition value − directly related acquisition expenses
The acquisition value is the amount you paid for the crypto, allocated to the units disposed of. Directly related acquisition expenses are costs that are demonstrably connected with acquiring that crypto. Keep a transaction-level schedule rather than relying only on an exchange’s “profit” figure.
Partial disposals require proportional allocation
When you sell only part of a holding, allocate the original acquisition value proportionally to the portion sold. SRS illustrates this with 0.1 Bitcoin bought for EUR 3,700. Selling one tenth for EUR 1,000 allocates EUR 370 of the original cost to the sale:
- Disposal price: EUR 1,000
- Allocated acquisition value: EUR 370
- Capital gain before directly related expenses: EUR 630
The same proportional method applies whenever a transaction disposes of only part of a lot or holding. Document the quantity sold, the quantity originally acquired and the allocation calculation.
When the original cost cannot be established
If you cannot establish the original acquisition value, SRS says to use zero. That increases the calculated gain, so reconstruct the basis before filing whenever possible. Useful evidence includes exchange confirmations, bank statements, wallet transaction IDs, broker statements and records of fees. Do not substitute an unsupported estimate for documentary evidence.
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For each disposal, record the date and time, asset and quantity, proceeds, acquisition lot or allocation, directly related costs, wallet or exchange reference and the resulting gain or loss. Convert foreign-currency amounts to euros using a consistently documented rate and retain the source of that conversion. A ledger also lets you reconcile deposits, withdrawals and internal wallet transfers that do not themselves create taxable income.
Apply the rate and the high-income surcharge
The personal income-tax rate on individual crypto capital gains is 25.5% for income from 2025 onward. Income earned under the earlier rules was subject to the rate applicable at that time, which was 20% before the 2025 change.
From 2025, an additional 3% applies through the annual return to the portion of a person’s total annual income above EUR 200,000. The EUR 200,000 test concerns total annual income, not just crypto gains. A person can therefore owe the 25.5% capital-gains rate on the gain and the separate 3% charge on the slice of combined annual income that exceeds the threshold.
Choose quarterly or annual filing
Latvia uses the amount of income from capital-asset transactions in each calendar quarter to determine when the DK declaration is due.
| Quarterly result | Declaration deadline | Payment deadline |
|---|---|---|
| Total income from capital-asset transactions exceeds EUR 1,000 | File once for that quarter by the 15th day of the month following the quarter. | Pay by the 23rd day of the month in which the return is filed. |
| Total income from capital-asset transactions does not exceed EUR 1,000 | File the annual capital-gains declaration by 15 January of the following year. | Pay by 23 January of the following year. |
The EUR 1,000 test is made separately for each quarter using your total income from capital-asset transactions. Do not assume that one profitable trade automatically creates a quarterly filing obligation: aggregate the relevant capital-asset transaction income for that quarter and apply the threshold. Keep the quarter-end calculation with your records.
Submit the DK return in EDS
The exact screen labels can change, but the filing sequence is consistent: select the capital-gains declaration, identify the crypto disposal as code K, enter the relevant period and submit electronically.
- Sign in to EDS. Use your VID/SRS Electronic Declaration System credentials.
- Open the capital-gains declaration. Choose the DK form named Pārskata perioda deklarācija par ienākumu no kapitāla pieauguma.
- Select the filing period. Use the quarter when the quarterly threshold is exceeded, or the relevant year for the annual route.
- Enter crypto disposal income under code K. Report the positive income calculated for each applicable crypto-asset disposal or the aggregate required by the form, preserving your transaction schedule as supporting evidence.
- Check the arithmetic. Confirm that proceeds, proportional acquisition costs and directly related expenses reconcile to your ledger and that non-realization wallet transfers or crypto-only swaps have not been counted as fiat disposals.
- Submit electronically. Save the EDS confirmation and the final submitted version.
- Pay by the applicable date. Use the payment details shown by EDS and observe the 23rd-day deadline for the filing route you used.
Do not attach purchase or sale receipts to the DK return unless SRS specifically requests them. You must nevertheless retain the evidence and provide it if requested.
Build an audit-ready record set
Keep records for at least five years from the relevant filing or transaction period. A complete file should allow an independent reviewer to move from bank payment or crypto receipt to acquisition lot, wallet movement, disposal and declared amount.
- Exchange trade confirmations showing date, quantity, price and fees.
- Bank statements for fiat deposits and withdrawals.
- Wallet addresses, transaction IDs and transfer histories.
- Records of crypto-to-crypto exchanges, including the assets and quantities received.
- Evidence supporting the euro conversion used for non-euro transactions.
- Invoices or contracts when crypto was received for goods, services, compensation or another income source.
- Your proportional-cost calculations for partial disposals.
- The submitted DK form, EDS acknowledgement and payment confirmation.
Reconcile exchange exports with wallet data before filing. Transfers between wallets you control should be identified as transfers, while an unrecognized withdrawal should be investigated rather than automatically classified as a taxable sale.
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What the 2026 information exchange changes
Latvia’s Ministry of Finance states that 2026 rules establish detailed procedures for crypto-asset service providers to collect and provide taxpayer transaction information to SRS for international exchange with other tax administrations. The policy increases the practical importance of accurate records: exchange exports, wallet transfers, cost basis and declared disposals should tell the same story.
The policy description does not itself set out every operational reporting date or the complete taxpayer workflow. Follow the current EDS instructions and SRS notices for implementation details, and keep source records even when an exchange has already supplied information to SRS.
Cases that need separate classification
MiCA-covered and potentially out-of-scope assets
SRS notes that the ordinary treatment may not apply, or may apply differently, to crypto-assets outside the scope of the Markets in Crypto-Assets (MiCA) framework. Classification can affect the income category and reporting method. Do not assume that every token has the same treatment.
Stablecoins, staking, airdrops, DeFi and NFTs
Stablecoins, tokenized instruments, staking rewards, airdrops, decentralized-finance returns and non-fungible tokens can involve facts that are different from a straightforward purchase followed by a fiat sale. The available data does not establish one universal Latvian rule for all of these categories. Identify what you received, why you received it, its euro value and the legal nature of the receipt before choosing a return and code.
Employer payments and compensation
Crypto paid by an employer or client is compensation income when received, not simply an investment acquisition. Keep the agreement, receipt date, euro valuation and any later disposal record so the initial income and subsequent investment result are not merged.
Worked examples
Fiat sale with a known cost
You buy a quantity of crypto for EUR 4,000 and later sell it for EUR 5,200. Assume EUR 100 of directly related acquisition expenses and that the entire holding is sold. The gain is EUR 1,100 (EUR 5,200 − EUR 4,000 − EUR 100). The applicable personal income-tax rate for income from 2025 onward is then applied to that positive gain, subject to the annual high-income rules.
Partial Bitcoin disposal
Using the SRS example, 0.1 Bitcoin costs EUR 3,700 and one tenth is sold for EUR 1,000. The allocated cost is EUR 370 and the gain is EUR 630 before directly related expenses. The remaining 0.09 Bitcoin retains the unallocated portion of the original acquisition value in your records.
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Crypto-only exchange followed by a later sale
You exchange Asset A for Asset B without receiving money, goods or services. The exchange is not a realized sale-income event at that swap under the SRS guidance. When Asset B is later sold for euros, calculate the gain using the acquisition information you can substantiate for the Asset B holding and report the later realization. Preserve both legs of the transaction so the later calculation is traceable.
Unknown acquisition value
If you sell crypto for EUR 2,000 but cannot establish its original acquisition value, SRS says to use zero. The resulting EUR 2,000 is the calculated disposal income before any directly related acquisition expenses that can be documented. Reconstructing the basis with bank, exchange and wallet evidence is therefore financially important.
Quick Recap
Common errors and how to correct them
- Declaring the purchase: Buying Bitcoin is not itself an annual or capital-gains declaration event. Record it for basis purposes.
- Taxing every crypto-to-crypto swap immediately: A crypto-only exchange without money, goods or services is not realized sale income at the swap under the SRS guidance.
- Using the whole lot cost for a partial sale: Allocate the acquisition value to the quantity disposed of.
- Ignoring directly related acquisition expenses: Include only costs you can document as connected with acquiring the disposed asset.
- Using an exchange’s headline profit number: Reconcile it to your own proceeds, basis, fees and wallet transfers.
- Missing the quarterly threshold: Test total capital-asset transaction income separately for each quarter.
- Applying the old rate: Use 25.5% for income from 2025 onward and consider the separate 3% annual charge above EUR 200,000 of total income.
- Assuming mining or services are private investing: Economic activity can require registration and business-income treatment.
- Failing to retain evidence: Keep the records for at least five years even though receipts are not normally attached to DK.
- Treating every token category alike: MiCA scope and the facts of staking, airdrops, DeFi, NFTs, stablecoins and compensation can change the analysis.
A practical filing checklist
- Separate personal investing from mining, service provision and compensation activity.
- Export exchange and wallet records for the year and label internal transfers.
- List every disposal for money, goods or services.
- For each disposal, calculate proceeds minus proportionate acquisition value and documented acquisition expenses.
- Remove break-even and loss transactions from crypto disposal income under the SRS guidance, while retaining the calculations.
- Aggregate capital-asset transaction income by calendar quarter and test the EUR 1,000 threshold.
- Apply the 25.5% rate for income from 2025 onward and check whether total annual income exceeds EUR 200,000.
- Complete the DK form in EDS using code K for crypto-asset transaction income.
- Submit by 15 January for the annual route or by the 15th of the month after a qualifying quarter.
- Pay by 23 January for the annual route or by the 23rd of the filing month for a quarterly return.
- Save the EDS confirmation, payment proof and supporting records for at least five years.
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