Taxation of Cryptoasset Transactions
Cryptoasset transactions are a rapidly growing area within the financial sector, offering new opportunities while requiring careful attention to taxation. The MiCA (Markets in Crypto-Assets Regulation) framework and oversight by the Bank of Latvia aim to establish a stable and transparent cryptoasset environment in Latvia. However, both individuals and businesses must understand the applicable tax requirements and seek professional guidance to ensure compliance with legal regulations.
Cryptoasset transactions are taxed based on their type:
- Personal Income Tax (PIT): Applied to capital gains (25.5%) from selling cryptoassets at a profit, as well as regular transactions deemed as economic activity, which require registration.
- Corporate Income Tax (CIT): Businesses are subject to CIT on trading income and related expenses, following accounting standards.
- Value Added Tax (VAT): Generally not applied to exchange transactions but may be relevant if cryptoassets are used as payment for goods or services.
To assist businesses and individuals in navigating the taxation of cryptoasset transactions, BDO Latvia offers professional services in the following areas:
- Tax and Accounting Compliance: Application of regulatory requirements for transactions involving virtual currencies, including assistance with preparing tax declarations and organizing accounting records.
- Personal Income Tax: Analysis of capital gains and economic activity income to ensure accurate tax calculation.
- Corporate Income Tax: Guidance for businesses on cryptoasset accounting and tax application.
- Value Added Tax: Addressing VAT application issues and ensuring compliance.
Our tax specialists are ready to assist with all matters related to the taxation of cryptoasset transactions. With extensive expertise, we provide precise and efficient solutions to ensure compliance with regulatory requirements.
Let us help you navigate the complexities of cryptoasset taxation with confidence and professionalism.