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06/10 12:59

Latvia Approves New Cryptocurrency Tax Bill, Sets

Latvia Approves New Cryptocurrency Tax Bill, Sets 2026 DAC8 Compliance Deadline

On June 3, the Cabinet of Ministers of Latvia approved Bill No. 24-TA-3148, a major step towards aligning the country’s tax laws with the Crypto Asset Reporting Framework (CARF) and the EU DAC8 Directive. The new legislation introduces stricter reporting and due diligence rules for crypto asset service providers and will come into force on January 1, 2026.

Highlights of Latvia’s New Crypto Regulation

DAC8 Directive Implementation: The bill incorporates Directive 2023/2226/EU (DAC8), which sets out detailed reporting standards for crypto service providers to prevent cryptocurrency-related tax evasion and financial fraud.

  Automatic data exchange: Aligned with the Multilateral Competent Authorities Agreement (MCAA), the new framework enables cross-border exchange of financial data for greater transparency under CARF.

Stronger reporting obligations: The Common Reporting Standard (CRS) and CARF now extend to cryptocurrency, requiring service providers to report crypto assets, swaps, and electronic money products, including central bank digital currencies (CBDCs).

Non-compliance penalties: Failure to comply with reporting requirements can result in fines of up to €14,000 (~$16,026).

New definitions introduced: The bill formally defines reportable crypto assets and crypto swaps, closing critical gaps in earlier rules that allowed for tax loopholes.

  EU-wide adoption deadline: All EU Member States must publish their DAC8-compliant rules by 31 December 2025.

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