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For an individual investing in crypto-assets personally, Latvia generally taxes a positive gain when the asset is disposed of for official currency, goods or services. Calculate the gain as the disposal value minus the documented acquisition value and directly related acquisition costs, then report it in the State Revenue Service (VID/SRS) Electronic Declaration System (EDS) using the DK capital-gains declaration and income code K.
The personal income-tax rate for gains from 2025 onward is 25.5%. A separate 3% surcharge can apply in the annual return to the part of total annual income above EUR 200,000. Your filing deadline depends on whether total income from capital-asset transactions in a quarter exceeds EUR 1,000.
Who this Latvian crypto-tax treatment covers
This guide describes the usual treatment for a Latvian-resident individual who buys and sells crypto-assets for their own account. In that situation, income from disposing of virtual currency is treated as income from capital growth (capital gain), rather than as salary or business turnover.
The treatment is not automatically suitable for a company, a person trading on behalf of customers, a miner, a validator, or anyone operating a crypto-related service as a business. Those activities can be economic activity and require a different registration, accounting and tax analysis. Assets or transactions outside the scope of the Markets in Crypto-Assets Regulation (MiCA) can also be treated differently under current SRS guidance.
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The capital-gain formula
For each disposal that produces a gain, use this formula:
capital gain = disposal price − acquisition value − directly related acquisition expenses
Disposal price
The disposal price is the value you receive when you dispose of the crypto-asset. A sale for euros is normally measured by the amount of money received. A disposal for goods or services is measured by the value of what you receive. Keep the transaction record that shows the date, quantity, asset, consideration and any fee.
Acquisition value
Acquisition value is what you paid to obtain the portion of the asset that you later dispose of. Your exchange confirmations, bank statements, broker statements and wallet records should establish this amount. If the original acquisition value cannot be established, SRS guidance says to use zero. That rule can turn the entire disposal value into taxable gain, so reconstructing and preserving the basis is important.
Directly related acquisition expenses
Deduct costs directly connected with acquiring the crypto-asset, such as an acquisition commission shown on the purchase record. Do not assume that every account, network or subscription charge is deductible; retain an explanation and evidence showing that a cost is directly related to the acquisition.
Only a positive result is disposal income
If the disposal price is equal to or lower than the allocated acquisition value, no disposal income arises under the SRS crypto-disposal guidance. A break-even or loss transaction is therefore not entered as crypto disposal income on the DK return under that guidance. Do not invent a gain by ignoring a documented basis, and do not claim a loss offset unless a separate rule specifically allows it.
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How to allocate cost when you sell only part of a holding
When a disposal covers only part of a purchase, allocate the acquisition value proportionally to the quantity sold. The allocated amount is the basis used in the formula for that disposal.
The SRS example is straightforward:
- You buy 0.1 Bitcoin for EUR 3,700.
- You later sell 0.01 Bitcoin (one tenth) for EUR 1,000.
- The allocated acquisition value is one tenth of EUR 3,700, or EUR 370.
- The capital gain is EUR 1,000 − EUR 370 = EUR 630.
At the 25.5% rate, the income-tax calculation on that EUR 630 gain is EUR 160.65, before considering any annual high-income surcharge. Keep the calculation showing how the fraction sold was derived.
For several purchases, assemble a lot-by-lot schedule that ties each quantity sold to a documented acquisition value. The available guidance does not establish a universal FIFO, LIFO or other lot-order rule for every fact pattern, so do not silently choose a method when your records cannot support it. If the lots, transfers or inherited assets make the basis uncertain, obtain a written position from SRS or professional Latvian tax advice before filing.
When a crypto transaction becomes a taxable disposal
Selling for euros or another official currency
A sale for official currency is realized when the money is received. The relevant disposal value is the amount received for the crypto-asset, with the documented acquisition value and directly related acquisition costs deducted under the formula.
Swapping one crypto-asset for another
A crypto-to-crypto exchange in which you receive no money, goods or services is not treated as realized sale income at the time of the swap under the SRS guidance. Realization occurs when the crypto you received is later disposed of for money, goods or services.
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Receiving crypto as payment or other income
Buying crypto is not an income event. Receiving crypto as payment for goods, services or another income source is different: declare that receipt according to the time and economic nature of the underlying income. SRS gives receipt of USDT in certain MiCA-related transactions as an example that is valued at its euro market value when received.
If that crypto is later sold, the later disposal must be analyzed separately. Preserve the euro value used when the income was first recognized and the records of the later sale; do not treat a payment receipt as if it were an ordinary personal purchase.
Latvia’s rates for crypto capital gains
| Income period | Rate and qualification |
|---|---|
| Through 2024 | The previous personal capital-gains rate was 20%. |
| From 1 January 2025 | 25.5% on an individual’s taxable crypto capital gain. |
| From 1 January 2025, annual return | An additional 3% applies to the portion of total annual income above EUR 200,000. The threshold concerns total annual income, not just one crypto trade. |
The 3% amount is calculated through the annual income-tax return on the excess above EUR 200,000. Consequently, a person whose total annual income exceeds that level can have a marginal burden of 28.5% on the portion covered by both rates. The surcharge is not a reason to apply 28.5% to every transaction automatically; first calculate the ordinary capital gain and then complete the annual-income calculation.
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Latvia uses a EUR 1,000 quarterly threshold for capital-asset transaction income. Test the total income from capital-asset transactions in each calendar quarter, rather than looking only at your largest individual sale.
| Quarter in which the income arises | If quarterly total exceeds EUR 1,000 | Payment deadline |
|---|---|---|
| January–March (Q1) | Submit the capital-gains declaration by 15 April. | Pay by 23 April. |
| April–June (Q2) | Submit by 15 July. | Pay by 23 July. |
| July–September (Q3) | Submit by 15 October. | Pay by 23 October. |
| October–December (Q4) | Submit by 15 January of the following year. | Pay by 23 January of the following year. |
When the total does not exceed EUR 1,000 in a quarter, the annual route applies: submit the annual capital-gains declaration by 15 January of the following year and pay by 23 January. Apply the threshold to the quarter’s total capital-asset transaction income; it is not a separate EUR 1,000 allowance for every coin or exchange account.
For example, if Q1 is EUR 900, Q2 is EUR 1,200, Q3 is EUR 0 and Q4 is EUR 700, Q2 follows the quarterly deadline. Keep a quarter-by-quarter worksheet so the threshold decision can be demonstrated.
How to file the DK declaration in EDS
- Prepare the transaction schedule. List each disposal, date, asset, quantity, euro disposal value, allocated acquisition value, directly related acquisition expenses and resulting gain. Separate non-disposals, such as purchases and crypto-only swaps, from realized disposals.
- Determine the filing route. Add the capital-asset transaction income for each calendar quarter and identify every quarter above EUR 1,000. Use the quarterly deadline for those quarters; use the annual route for quarters that remain at or below the threshold.
- Sign in to EDS. Open the State Revenue Service Electronic Declaration System and create the capital-gains return named “Pārskata perioda deklarācija par ienākumu no kapitāla pieauguma” (DK).
- Enter crypto disposals under code K. Use income form code K for income from a crypto-asset transaction. Enter the values supported by your schedule and follow the form’s period and calculation fields.
- Review the totals. Check that each positive disposal gain is included once, that a partial sale uses only its proportional basis, and that purchases or non-realized crypto swaps have not been entered as sales.
- Submit electronically. Send the completed DK form through EDS by the applicable 15th-day deadline. Arrange payment of the calculated tax by the applicable 23rd-day deadline.
- Retain the working papers. The DK form does not require purchase and sale receipts to be attached, but SRS can request evidence later.
The DK return is for capital-gain reporting. It does not replace a return required for salary, service income, mining income or another category of income that arose when crypto was received.
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Keep purchase and sale evidence for at least five years. A defensible record set should include:
- Exchange trade confirmations and downloadable account statements.
- Bank records showing fiat payments and receipts.
- Wallet addresses, transaction IDs and transfer dates.
- Evidence of quantities moved between your own wallets and exchanges, so a transfer is not mistaken for a sale.
- Fee records identifying which costs were directly related to acquisition.
- The calculation that allocates basis to each partial disposal.
- Euro valuations and supporting records for crypto received as payment or other income.
- A quarterly threshold worksheet and copies of submitted DK forms and payment confirmations.
Do not rely on a single exchange’s current interface. Export files periodically, preserve the original file format and keep a readable copy. Reconcile exchange exports to on-chain records and bank statements, especially when accounts have been closed or assets have moved between platforms.
Personal investing versus economic activity
| Activity | Likely treatment indicated by SRS guidance | Action |
|---|---|---|
| Buying and selling crypto for your own investment | Personal capital-gain treatment for positive realized disposals. | Use the capital-gain formula and DK code K. |
| Providing crypto trading or other crypto services to clients | Economic activity; not automatically personal capital gain. | Analyze registration, business-income accounting and related obligations. |
| Mining or creating virtual currency | Economic activity under the SRS description. | Use the applicable business or economic-activity treatment rather than assuming code K covers everything. |
| Only buying and selling crypto, with no other taxable business activity | Ordinary crypto buying and selling is generally not subject to VAT. | VAT registration is generally unnecessary unless another legal trigger applies. |
| Crypto activity alongside VAT-taxable activities | Crypto transaction value is included when assessing the EUR 50,000 VAT-registration threshold. | Check the combined activity against the threshold and other VAT rules. |
The distinction depends on what you actually do, not on the label used for an exchange account. Repeated services for other people, customer funds, mining infrastructure and contractual compensation are warning signs that the personal-investor route may not fit.
Assets and transactions that need extra classification
SRS notes that the ordinary treatment may not apply, or may apply differently, to crypto-assets outside MiCA’s scope. Treat the following as fact-specific rather than assuming they are ordinary investment sales:
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- Tokenized financial instruments.
- Staking rewards, validator rewards and lending returns.
- Airdrops, forks and promotional distributions.
- Decentralized-finance transactions, liquidity positions and protocol rewards.
- Non-fungible tokens and sales of related rights.
- Employer payments, contractor compensation and other receipts for work.
First identify what the receipt or disposal represents, when income arose and which valuation is required. Only then decide whether a later sale belongs on the DK return. If the asset is outside MiCA or the facts combine several income types, document the classification and seek current SRS clarification.
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What the 2026 information-exchange rules change
Latvia’s Ministry of Finance states that rules applying in 2026 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 description does not itself set out every operational reporting date or a complete taxpayer workflow.
For an individual, the practical consequence is a higher need for reconciliation. Make sure the name and tax-identification details used with service providers are consistent, and resolve differences between provider exports, wallet history, cost basis and DK declarations before SRS asks about them. Information exchange does not change the capital-gain formula, but it makes unsupported totals and unexplained transfers easier to detect.
Worked cases
Case 1: documented purchase and fiat sale
You buy 0.1 BTC for EUR 3,700 and later sell 0.01 BTC for EUR 1,000. The proportional basis is EUR 370, producing a EUR 630 gain. At 25.5%, the ordinary tax calculation is EUR 160.65. Record the transaction in the relevant DK period and retain both the purchase and sale confirmations.
Case 2: sale below basis
You acquire a token for an allocated EUR 2,000 and later sell the portion for EUR 1,850. Because the disposal value is below the allocated basis, no disposal income arises under the cited SRS guidance. Do not enter EUR 1,850 as a positive crypto-disposal gain.
Case 3: crypto-only exchange
You exchange one crypto-asset for another and receive no fiat, goods or services. The exchange is not a realized sale at that point under the SRS treatment. Preserve the records and analyze realization when the received asset is later disposed of for money, goods or services.
Case 4: crypto received for work
You receive USDT for a service. The receipt is income from the service at its euro market value when received, as illustrated by SRS guidance for certain MiCA-related transactions. A later sale of that USDT is a separate disposal question; retain the receipt valuation and the later sale evidence.
Case 5: missing basis
You can prove that you sold crypto for EUR 4,000 but cannot establish its acquisition value. SRS guidance says to use zero when the original acquisition value cannot be established, so the calculation produces EUR 4,000 of gain before any directly related acquisition expenses that can still be documented. This is why reconstructing old statements and wallet histories matters.
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Quick Recap
Common filing mistakes and how to correct them
- Reporting every purchase: A purchase is not reported on the annual or capital-gains return. Keep the purchase record as basis evidence.
- Taxing every crypto swap immediately: A crypto-only swap is not realized sale income at the swap when no money, goods or services are involved.
- Using the full purchase cost after a partial sale: Allocate the basis to the quantity sold; do not deduct the cost of coins still held.
- Ignoring the quarterly test: Calculate the quarter total and use the 15th/23rd deadlines when it exceeds EUR 1,000.
- Applying the old 20% rate: Use 25.5% for gains from 2025 onward and assess the separate annual 3% surcharge above EUR 200,000 total income.
- Entering a loss as a positive gain: A disposal at or below allocated basis produces no disposal income under the SRS crypto guidance.
- Assuming mining or customer services are investing: Those activities can be economic activity and need separate treatment.
- Discarding evidence: Keep the records for at least five years, even though receipts are not attached to the DK form.
A practical pre-filing checklist
- Export all exchange and wallet records for the period.
- Mark transfers between your own wallets so they are not counted as disposals.
- Classify each event as a purchase, crypto-only swap, fiat sale, disposal for goods or services, payment received, reward or business activity.
- Establish the acquisition value for every disposed quantity; use zero only when it genuinely cannot be established.
- Allocate basis proportionally for partial disposals.
- Subtract only documented expenses directly related to acquisition.
- Remove transactions that produce no positive disposal income under the SRS guidance.
- Calculate each quarter’s total capital-asset transaction income and select the correct deadline.
- Complete the DK declaration in EDS with code K for crypto-asset transaction income.
- Check the annual EUR 200,000 threshold and retain the complete audit trail for at least five years.
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