New obligations for crypto asset service providers
New obligations for crypto asset service providers
The crypto-asset market has experienced rapid development in the last decade, but its decentralized nature makes tax administration difficult. Therefore, since January 1, 2026, crypto-asset service providers in Latvia are obliged to collect, verify and submit information about their clients and their transactions to the State Revenue Service. The new regulatory framework significantly expands tax transparency in the field of crypto-assets.
Legal framework
At the international level, the Organisation for Economic Co-operation and Development (OECD) developed and approved in 2022 the Crypto-Asset Reporting Framework (CARF), which aims to promote tax transparency in the field of crypto-assets by establishing a standardised mechanism for the collection, reporting and automatic exchange of information between jurisdictions. More than 70 jurisdictions have committed to start exchanging information under the CARF by 2027 or 2028.
In the European Union (EU), the principles of the CARF have been implemented by Directive 2023/2226 amending Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC8). The preamble of the Directive stresses that EU rules should take into account the framework developed by the OECD in order to increase the efficiency of information exchange and reduce administrative burdens.
Although the first reporting cycle covers transactions for 2026, the availability of structured information expands the tax administration's ability to compare cryptoasset transaction data with taxpayers' declared information and financial position. This may raise additional questions about the origin of funds or transactions from previous periods, especially in cases where significant discrepancies have been identified.
Read the full article on the iFinanses portal here
Legal framework
At the international level, the Organisation for Economic Co-operation and Development (OECD) developed and approved in 2022 the Crypto-Asset Reporting Framework (CARF), which aims to promote tax transparency in the field of crypto-assets by establishing a standardised mechanism for the collection, reporting and automatic exchange of information between jurisdictions. More than 70 jurisdictions have committed to start exchanging information under the CARF by 2027 or 2028.
In the European Union (EU), the principles of the CARF have been implemented by Directive 2023/2226 amending Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC8). The preamble of the Directive stresses that EU rules should take into account the framework developed by the OECD in order to increase the efficiency of information exchange and reduce administrative burdens.
Although the first reporting cycle covers transactions for 2026, the availability of structured information expands the tax administration's ability to compare cryptoasset transaction data with taxpayers' declared information and financial position. This may raise additional questions about the origin of funds or transactions from previous periods, especially in cases where significant discrepancies have been identified.
Read the full article on the iFinanses portal here