Latvian Gov’t Considers Recognizing Cryptos As ‘Means Of Exchange’

Latvian Gov’t Considers Recognizing Cryptos As ‘Means Of Exchange’

Latvian crypto enthusiasts may soon start enjoying cyber assets legally. However, they will also be obliged to pay taxes on them. According to local reports, the government of the country is getting ready for acknowledging digital money as official means of swapping. Therefore, the budget of Latvia will be getting filled with the funds of taxpayers who carried out crypto deals.

It is notable that the Latvian tax filing process of 2018 is in hand and the gov’t has to hurry up. However, the Ministry of Finance of this state, as well as two parliamentarian commissions, have already voiced out their opinions on the case.

Latvia Remains Cautious Concerning Cryptos

The gov’t of Latvia seems to still consider cyber assets as hazardous ones. Nevertheless, they are ready to take a few steps forward to make the budget filled in by those who utilize cryptos.

On April 11, the officials from the country’s Finance Ministry announced that a 20% tax could be levied on capital earnings from transactions with cyber money. They released the suggestion during the gathering with the Latvian Parliamentary Budget lawmakers as well as Taxation Committee reps.

At that meeting, several deputies emphasized that as of now virtual coins are not deemed a legal tender in Latvia. They also added that they often come on par with speculations and can be related to bubbles and financial schemes.

By contrasts, representatives of the Financial and Capital Markets Committee remarked that nevertheless cyber-coins could be treated and used as “means of exchange,” News.Bitcoin.com reports.

Regulations May Come Up Soon

Officials from the Baltic Country’s Ministry of Finance unveiled that the country’s gov’t is considering applicable rules over cyber assets.

So far, the Prime-Minister Māris Kučinskis has established a working group which is to constitute the suggestions. During the process of preparation, the group is supposed to study the jeopardies on the market as well as assess the would-be profits related to virtual-coins.

Cryptos To Be “Means Of Exchange” In Latvia?

Lawmakers usually attack cyber money for not being able to function as public currencies. By this often mean that cryptos cannot simultaneously operate as means of exchange and payment, units of account or a store of value. However, when it comes to taxes, gov’ts tend to be “softer” towards cryptos.

By treating digital assets as mediums of exchange the country’s authorities will be able to imply taxes on crypto remittances and other financial operations.

Currently, in Latvia cryptos are not in the sphere of work of any law. However, the state's authorities claim that gains from cyber money trading entail tax implications – personal and corporate taxation.

Here are some types of taxation in Latvia:

  • Flat income tax – 23%
  • Income from dividends and interests tax – 10%
  • Capital earnings from shares and real estate – 15%
  • Value Added Tax – 21%

It is noteworthy that financial operations are not subject to VAT.

Meanwhile, tax returns in Latvia are filed in the frames of March 1 – June 1, so perhaps the next year Latvian taxpayers might be obliged to report about their crypto gains.