This guide is for informational purposes only and does not constitute tax advice.
If you have moved to Latvia recently, or you are based here but not yet a tax resident, and you hold or trade crypto — there is a change from 2025 that is directly relevant to you.
In short: Latvia removed the withholding tax on crypto sales for non-residents. Here is what that means in practice.
What the rule used to be
Until the end of 2024, any crypto exchange licensed in Latvia was required to withhold 3% from payouts when a non-resident sold crypto assets. The money came out before you saw it, and reclaiming it meant paperwork, tax certificates, and dealing with bureaucracy most people would rather avoid.
For a small country trying to attract crypto businesses, this was a real problem. No comparable EU country had the same rule, and exchanges had little reason to base themselves in Latvia because of it.
What changed in April 2025
Latvia’s parliament — the Saeima — passed amendments to the Personal Income Tax Law on 10 April 2025. The key addition was a transitional provision stating that from 1 January 2025 until 31 December 2027, income that a non-resident individual earns from selling publicly traded crypto assets is not taxable in Latvia.
The 3% withholding is gone, backdated to the start of 2025.
The law also swapped the word “cryptocurrency” for “crypto assets” throughout, bringing it in line with EU terminology under MiCA. The practical effect for you is the same.
Wait — am I actually a non-resident?
This is the part that trips up a lot of people who have recently moved to Latvia. There are three separate things that often get confused:
- Having a residence permit (temporary or permanent)
- Being a tax resident
- Being a non-resident for tax purposes
A residence permit does not determine your tax status. Those are two different systems.
Under Latvian law, you become a tax resident if any of the following apply:
- You have a declared place of residence in Latvia
- You have spent 183 days or more in Latvia during a calendar year
- Latvia is your centre of vital interests — meaning your family lives here, you own property here, or this is where most of your income comes from
If none of those apply — say, you spend most of your time abroad, have no registered address in Latvia, and Latvia is not the centre of your life — then you are likely a non-resident for tax purposes, even if you hold a Latvian residence permit.
The exemption in this article applies to non-residents. If you are a Latvian tax resident, your crypto gains are taxable under the standard rules regardless of this change.
Not sure which side you fall on? That is worth checking with a tax adviser, because the answer depends on your personal situation.
Why Latvia did this
The EU’s MiCA regulation came into force at the end of 2024. It requires any company offering crypto asset services to hold a licence in at least one EU country. That triggered a quiet competition between member states to be the most attractive option.
Latvia wanted a piece of that market. But it could not realistically compete while taxing non-resident customers at source. The exemption removes that obstacle. The government is essentially betting that attracting licensed crypto businesses will be worth more to the economy than the revenue from the 3% tax.
The Cabinet of Ministers has until the end of 2027 to assess whether that bet paid off and decide what happens next. The exemption may be extended, made permanent, or replaced with something different.
What this means for you day to day
If you are a non-resident using a Latvian-licensed exchange, you will not have 3% withheld when you sell crypto through the end of 2027.
One thing to keep in mind: this only covers Latvia’s side of the equation. What you owe in your country of tax residence is a separate matter, governed by local rules and any applicable tax treaties. Latvia removing its withholding tax does not change what your home country expects from you.
Key Takeaways
- Latvia removed the 3% withholding tax on crypto sales for non-residents
- The exemption runs from 1 January 2025 to 31 December 2027
- A residence permit does not make you a tax resident — the two are separate
- Latvian tax residents are not covered by this exemption
- Tax obligations in your country of residence still apply
FAQ
Does this apply to me if I live in Latvia but am not registered here?
Possibly. If you have no declared address in Latvia, spend less than 183 days here, and Latvia is not your centre of vital interests, you may qualify as a non-resident. This is worth verifying with a tax adviser.
I have a Latvian residence permit. Does that make me a tax resident?
Not automatically. Residence permits and tax residency are separate. See the section above for the criteria that actually determine your tax status.
Does this apply forever?
No. The exemption currently runs until 31 December 2027. The government will review it before that date.
Do I still pay crypto tax in my home country?
Possibly — this depends entirely on your home country’s rules. Latvia’s exemption only covers what Latvia would otherwise have withheld.
Which exchanges does this cover?
Exchanges that are licensed and operating in Latvia. Whether a specific platform falls under this depends on where it holds its licence.
Official Sources
- VID — State Revenue Service of Latvia
- Saeima Legislative Portal
- European Commission — MiCA Regulation
Last updated: May 2026