This guide is for informational purposes only and does not constitute tax advice.
If you hold crypto while living in Latvia, you may have seen references to something called DAC8 lately. It sounds technical, and most of the coverage reads like it was written for compliance officers rather than people who just want to know if anything changes for them personally.
Here is the short version: DAC8 does not create a new tax. It changes how much information tax authorities can see. And from 2027, that includes your crypto.
What DAC8 actually is
DAC8 is an EU directive that extends automatic tax information exchange to cover crypto assets. Think of it as the crypto version of the system that already exists for bank accounts — where your bank quietly sends a report to tax authorities each year about your balances and transactions.
Latvia’s parliament received draft amendments to the Law on Taxes and Duties in June 2025, with changes expected to take effect from 1 January 2026. The framework these amendments implement combines two international standards: CARF (Crypto-Asset Reporting Framework, developed by the OECD) and an updated version of CRS — the Common Reporting Standard already used globally for bank data.
So does this mean I will be taxed automatically?
No. DAC8 is a reporting framework, not a tax mechanism.
It does not create new tax obligations. What it does is give tax authorities access to information they may not have had before. If you were already required to declare crypto gains under Latvian law — and you are, if you are a tax resident — DAC8 does not change that requirement. It changes how easily VID can see whether you did.
How the reporting works in practice
From 2026, exchanges, custodial wallets, payment apps, and other qualifying crypto service providers in participating countries will begin collecting structured data about their users’ transactions.
From 2027, they will report that data to local tax authorities, who will pass it on to the tax authority in the country where the account holder is a tax resident.
In practical terms: if you are a tax resident in Latvia and you use Coinbase, Revolut, Kraken, Binance, or Wise, those platforms — if operating in a participating country — may be required to report your activity to their local authority, which then shares it with VID.
This applies even if you never converted crypto to euros. Holding, trading between tokens, or receiving crypto as payment are all within scope.
What information could be shared
The framework covers:
- Your name, tax ID, and country of residence
- Individual transactions: purchases, sales, exchanges, deposits, withdrawals
- Year-end balances
- Asset types: Bitcoin, Ethereum, stablecoins (USDT, USDC), NFTs, DeFi tokens
- Associated wallet addresses, where identifiable
Which countries are in
As of mid-2025, 52 countries have committed to start exchanging data by 2027. This includes all EU member states, plus the UK, Switzerland, Canada, Japan, Norway, Israel, South Korea, and others.
A second group — including Singapore, UAE, Hong Kong, and Turkey — is expected to join from 2028.
The notable holdout is the United States. It has not joined the international exchange framework, though it introduced its own domestic crypto reporting system for the IRS from early 2025. That data stays in the US.
What this means if you live in Latvia
If you are a Latvian tax resident with crypto on any major custodial platform, the practical situation from 2027 looks different from today. VID may begin receiving automatic reports about your holdings and transactions — not because a new tax was introduced, but because the information infrastructure now exists to share that data.
If you have been declaring your crypto income and gains correctly, this changes nothing for you practically. If you have not been, 2026 is a reasonable time to get your filings in order before the reporting framework is fully operational.
For freelancers receiving payment in crypto: if those payments land in a custodial wallet linked to your identity, they fall within scope of what may be reported.
If your situation is complicated — multiple exchanges, non-custodial wallets, income from DeFi — speaking with a Latvian tax adviser before the end of 2026 is worth considering.
Key Takeaways
- DAC8 is a reporting framework, not a new tax
- Crypto service providers in 52+ countries will begin sharing transaction data from 2027
- VID may start receiving automatic reports about Latvian residents’ crypto activity
- This applies even without conversion to fiat
- Existing tax obligations for residents do not change — but enforcement visibility does
FAQ
What is DAC8?
An EU directive that extends automatic financial data exchange to crypto assets. It builds on the same framework already used for bank accounts.
When does this start affecting me?
Providers start collecting data in 2026. The actual exchange of information with VID is expected from 2027.
Does DAC8 apply to Bitcoin?
Yes. Bitcoin, Ethereum, most altcoins, stablecoins, and certain NFTs all fall within scope.
Does DAC8 create a new crypto tax in Latvia?
No. Latvia’s existing tax rules for crypto already apply to residents. DAC8 improves the reporting infrastructure — it does not introduce new taxes.
What if I use an exchange based outside the EU?
If that exchange operates in any of the 52+ participating countries, it may still fall under the reporting requirements. The list includes major crypto jurisdictions beyond Europe.
Does this affect non-residents?
The reporting applies to all account holders, regardless of residency. Whether VID takes action based on that data depends on Latvia’s tax rules for non-residents — which are covered in a separate guide on the crypto tax exemption for non-residents.
Official Sources
- VID — State Revenue Service of Latvia
- OECD — Crypto-Asset Reporting Framework
- European Commission — DAC8
- Ministry of Finance Latvia
Last updated: May 2026