Correction. The article's claim that "the investment account principle is also extended to crypto-assets" and that tax is payable only upon withdrawal of funds contradicts the wording of the law as currently in force — the SRS methodological guidance "Income from an investment account" expressly states that investment account status cannot be granted to an account in which crypto-asset transactions are conducted. It would be more accurate to state that the amendments create a separate one-off declaration mechanism (10% of the market value as of 31 December 2026) with participation limited solely to EU-licensed crypto-asset service providers, rather than extending the classic investment account regime. The article likewise fails to mention that the mechanism applies only to crypto-assets subject to the MiCA regime, and that self-custodied crypto addresses constitute a separate declaration category.
Under point 204 of the Transitional Provisions, the Cabinet of Ministers must, by 30 September 2027, submit to the Saeima a report on the regulation's impact on tax revenue, attracted funding and employment.
For a non-resident, income from the disposal of publicly circulating crypto-assets in Latvia is non-taxable from 1 January 2025 to 31 December 2027 (point 203 of the Transitional Provisions).
Amendments to the Law "On Personal Income Tax", adopted by the Saeima at the final reading, address the long-standing crisis concerning crypto-asset tax obligations: under a one-off mechanism, the declarant pays 10% of the market value of the assets as determined on 31 December 2026 and is deemed to have fully discharged all obligations for previous periods. This means that individuals with historical crypto-profit liabilities or inadequately declared holdings face a choice between the one-off 10% regularisation and the standard 25% tax on capital gains. For the market participant, not only the rate changes but also the moment at which the tax is calculated. The legal question is the application of the provisions of the Law "On Personal Income Tax" (hereinafter — the PIT Law), including Article 11.9 on capital gains and point 203 of the Transitional Provisions, to transactions in crypto-assets, which qualify for tax purposes under Regulation (EU) 2023/1114 (MiCA) and the Law on the Prevention of Money Laundering and Terrorist and Proliferation Financing.
Article 11.9(1.1) and point 8 of the second part of Article 11.9 of the PIT Law classify virtual currencies (crypto-assets) as capital assets; accordingly, gains from their disposal constitute taxable income from capital gains. Under Article 19(3.2) and (5.3), income from the exchange of crypto-assets is realised only at the moment when the acquired crypto-assets are disposed of for money, goods or services — this is confirmed by the State Revenue Service (VID) Example No. 10, in which a crypto-to-crypto exchange in itself gives rise to no tax obligation, whereas conversion back into euros produces EUR 150 of taxable income from a sale of EUR 1,000 with an acquisition value of EUR 850. The new regulation adds an investment account regime to this: tax is payable only when the amount withdrawn exceeds the amount invested in the account, and its application involves EU-licensed service providers, which in Latvia have been registered and supervised by the Bank of Latvia since 30 December 2024. The support framework operates on three levels:
Point 204 of the Transitional Provisions obliges the Cabinet of Ministers to submit a report to the Saeima by 30 September 2027 on the appropriateness of this regulation. Information on crypto-asset transactions is also provided to the VID within the framework of automatic exchange of information; consequently, undeclared holdings on foreign platforms are identifiable even without any initiative on the part of the individual. Losses from crypto-asset transactions cannot be offset against income from other capital assets — they are treated separately.
| Options | Rate / status | Basis or period |
|---|---|---|
| One-off mechanism | 10% | Market value as at 31 December 2026; obligations for all previous periods deemed discharged |
| Capital gains | 25% | Actual profit |
| Non-resident exemption | 0% in Latvia | 1 January 2025 – 31 December 2027 |
The practical consequences fall across different categories of persons. For residents with undeclared historical holdings, the 10% rate on the end-2026 value may be significantly more advantageous than 25% on accumulated capital gains; moreover, it relieves them of the need to calculate obligations for each earlier transaction. For crypto-asset service providers holding an EU licence, a new service market emerges — the maintenance of investment accounts — together with a reporting burden, since both they and reporting providers transmit data on client transactions to the VID under the automatic exchange regime. For non-resident investors, income from the disposal of publicly circulating crypto-assets realised by the end of 2027 is not taxable in Latvia, which, together with the licensing environment, creates an attractive structure.
In the case of an unregistered recipient of author's remuneration, the SSIA calculates the contribution object of EUR 643.71 (200 x 100 : 31.07) from the EUR 200 VSAOI portion, and benefits are calculated precisely from that amount, not from the full EUR 1000 fee.
A self-employed person whose monthly income does not reach the minimum wage of EUR 780, by virtue of Section 14.1(1) of the Law, makes only 10% contributions for pension insurance once per quarter and is not covered by the other insurance types.
At the heart of this story is not tax optimization, but the difference between how much a person is socially insured for and how much they believe they are insured for — because the amount of benefits and pension is calculated by the SSIA (VSAA) solely from the registered compulsory contribution object. For a recipient of royalties/author's remuneration who has not registered economic activity, out of a EUR 1000 fee the payer withholds EUR 250 of personal income tax (IIN), of which the state social insurance contribution (VSAOI) portion is EUR 200, and the SSIA calculates the contribution object retrospectively — EUR 643.71 (200 x 100 : 31.07), not from the full EUR 1000. The legal questions — what is the scope of compulsory insurance and the contribution object in each status — are governed by Sections 6, 13, 14 and 14.1, Section 17 and Section 18 of the Law "On State Social Insurance", as well as Cabinet Regulation No. 790 of 21.07.2009 and Cabinet Regulation No. 879 of 21.12.2021 on the registration of contribution payers and reporting. The practical takeaway: the choice of status (general regime, micro-enterprise tax, unregistered economic activity) directly determines both the number of insurance types and the contribution base from which sickness and maternity benefits and pension capital are calculated.
For an employee, the compulsory contribution object is all income calculated for paid work (Section 14(1) of the Law), the total rate is 34.09%, and the greater part is paid by the employer from its own funds — Section 17(3) provides that the employer makes the contributions in full from its own funds, while the case law of the Constitutional Court (the case on the conformity of point 1 of the Transitional Provisions of the Law with Article 1 and Article 109 of the Constitution and Article 9 of the International Covenant) has found that an employee can neither waive the withholdings nor make the contributions themselves, nor control the employer — this is a matter of public-law relations that the state secures itself. For a self-employed person, the contribution object is freely chosen income from economic activity (Section 14(2)), and Section 14.1 provides: if monthly income does not reach the minimum wage (EUR 780), 10% must be paid quarterly for pension insurance only; if it is reached — 31.07% of an object not less than the minimum wage, plus 10% of the difference. Comparison by status:
| Status | Contribution base / rate | Insurance types | |
|---|---|---|---|
| Employee | Gross wage; 34.09% | All types, including unemployment and accident insurance | |
| Self-employed (general regime) | Chosen income; 31.07% or 10% | Pension, disability, maternity, paternity, sickness, parent's insurance | |
| MU (micro-enterprise tax) payer | 25% of turnover, of which 80% — VSAOI; the object is calculated by the SSIA applying the 31.07% rate (Section 17(23)) | As for the self-employed | |
| Recipient of author's remuneration (without registration) | 80% portion of the 25% IIN withheld; object EUR 643.71 out of a EUR 1000 fee | As for the self-employed; no unemployment or accident insurance | The maximum contribution object in 2025 and 2026 is EUR 105,300, and in the calculation of the annual average contribution wage (EUR 1,589 for indexation in 2026) all amounts are taken into account from the first cent up to the maximum. If there is a wage at one workplace and, in parallel, self-employed status, benefits and pension are calculated from the total VSAOI paid of all kinds, so a hybrid form with a minimum wage and the remainder as a fee reduces both the benefit base and the unemployment and accident insurance, which does not exist at all for author's remuneration. |
Practical consequences of the chosen status:
Does Section 4(1) of the Public Entertainment and Festive Events Safety Law prohibit the organisation of a commercial concert on 4 July — the Day of Remembrance of the Victims of the Genocide of the Jewish People — and does this prohibition also extend to privately organised commercial events, and not merely to events organised by state and municipal institutions?
This analysis rests on general principles of law, as no direct extract of the statutory provision is available in the database. According to the explanation of Mārtiņš Vilemsons, project coordinator at the External Communications Division of the Riga municipal government, Section 4(1) of the Law provides that state and municipal institutions do not hold public events on the designated remembrance days, and the municipality does not issue permits for the organisation of such events. The remembrance days in question are 25 March, 8 May, 14 June and 4 July, and the Nickelback concert at the Xiaomi Arena is scheduled precisely for 4 July 2027.
The essential question of interpretation concerns the scope of the prohibition contained in the provision: the text, as quoted, clearly prohibits events organised by institutions and the non-issuance of permits, but it does not necessarily follow directly from it that a private commercial event held with a municipal permit is prohibited outright. In practice, this provision is generally read together with the permit regime — if the municipality does not issue a permit, the event cannot lawfully take place without one; thus, the prohibition on private events is achieved indirectly, through the permit regime, rather than by a direct prohibition of the activity itself.
(No text provided under this marker.)
For the concert organiser, the risk point is not the date as such, but the permit: without a permit from the Riga municipal government, the event at the Xiaomi Arena cannot lawfully take place, and on 4 July such a permit is not issued in accordance with the statutory procedure. The organiser must assess the risk of contractual obligations — ticket sales have commenced and the artist's booking contract has been or will be concluded, even though the authorisation of the event remains uncertain; accordingly, the contracts should include cancellation or rescheduling clauses linked to the non-issuance of the permit. Ticket purchasers raise a consumer protection aspect: if the event is cancelled, cancellation and refund rules apply.
In practical terms, the strongest position belongs to the municipality — the wording of Section 4(1) gives it a legal basis for refusing the permit without any exercise of discretion, and the organiser would find it difficult to challenge such a refusal as arbitrary. Point of supervision: it should be monitored whether the organiser reschedules the concert to another date or submits a permit application, the examination of which will reveal how the municipality — and, if necessary, the courts — interpret the application of Section 4(1) to commercial private events.
Section 20(2) of the State Civil Service Law provides that the duties in the job description of the Director of the State Chancellery are determined by the Prime Minister.
Where Section 26(4) of the Law on the Structure of Public Administration provides that if the Director's instruction conflicts with a minister's instruction, the minister's instruction prevails, the Chancellery Director's powers of coordination within the ministries are limited.
Kaspars Gorkšs, confirmed in the office of Director of the State Chancellery and commencing work on 16 November 2026, will assume the status of a senior-level state civil service official who heads the government's central support institution and is directly subordinate to the Prime Minister. The key point for the reader: notwithstanding the publicly debated lack of experience in public administration, the civil service legal regime will impose on Gorkšs the same requirements and accountability instruments as on any other official — experience is not a statutorily prescribed selection criterion, whereas the scope of official duties and the procedure for dismissal are strictly regulated. The specific legal question arising in this story is the procedure by which the Director of the State Chancellery is appointed, how his duties are defined, and how he may be removed from office — these matters are governed by Section 26 of the Law on the Structure of Public Administration and by the provisions of the State Civil Service Law on appointment, job descriptions, and removal from office.
The application of the governing norms to Gorkšs's case is as follows:
The practical developments flowing from these sources:
Correction. The earlier formulation suggested that the Prime Minister enjoys broad discretion in appointing the Director of the State Chancellery. This should be clarified: the discretion is not unlimited but is exercised within the framework of the State Civil Service Law, which requires a prior competition and a reasoned selection decision. It should also be specified that the government's decision of 20 October 2026 must be assessed against the procedural requirements in force at that date, and that compliance depends on whether the statutory steps — competition, assessment and reasoned selection — were duly completed before the decision was taken.
Article 11 of the State Civil Service Law provides that the Director of the State Chancellery is appointed to office for five years by the Prime Minister, and the appointment takes place following confirmation by the Cabinet of Ministers.
By mutual agreement, civil service relations with the Director of the State Chancellery may be terminated no earlier than six months after the commencement of cooperation.
Kaspars Gorkšs becomes Director of the State Chancellery, and he is met with a strictly regulated five-year term featuring a possible probationary period and pre-determined early dismissal before the term expires. On 20 October, the Government confirmed the Director-General of LDDK as a senior-level civil service official, and he may commence his duties on 16 November. His legal status will be governed by the State Civil Service Law — civil service relations with their specific regime of appointment, dismissal and termination. Article 11 and Article 41 of the State Civil Service Law, as well as Article 26 of the Law on the Structure of Public Administration, provide that the State Chancellery is directly subordinate to the Prime Minister and that its administrative head is the Director of the State Chancellery.
Article 11, Paragraph three of the State Civil Service Law provides that the Director of the State Chancellery is appointed to office by the Prime Minister for a term of five years. Paragraph four requires that appointment to this office take place following confirmation by the Cabinet of Ministers. The selection procedure consisted of an assessment commission of candidates and officials which, pursuant to the norms of Paragraph three of Article 11 and Article 3 of the Law, selects candidates and recommends them to the Prime Minister; the Prime Minister evaluates the commission's recommendation and decides on the appointment.
Practically, the immediate next steps for Gorkšs and the State Chancellery: