Latvian authorities may impose capital gains tax on cryptocurrency transactions, according to a Finance Ministry official. The move would see Latvia cash in on the crypto craze that’s already seeing transaction volumes in the country surge.
According to news outlet Xinhua, the director of the country’s Finance Ministry’s Department of Direct Taxes, Astra Kalane, revealed on public radio that “cryptocurrency transactions are very similar to capital gains.” This, the outlet added, is the reason the country’s Finance Ministry is looking to charge this tax on cryptocurrency transactions.
Latvia currently levies a 20 percent capital gains tax, and applying it to crypto would reportedly need the country’s taxation laws to be amended. Xinhua added:
“A possible regulation for crypto currencies was also discussed in the Latvian parliament on Wednesday, as representatives of the national financial regulator, the Financial and Capital Market Commission (FCMC), reported to the parliament budget and finance (taxation) committee on the situation with crypto currencies in Latvia.”
Regulators noted that investing in cryptocurrencies is extremely risky, and that these aren’t recognized as legal tender in the country. It seemingly is legal to trade, hold, buy and sell cryptocurrencies like bitcoin in the country. The Latvian government has so far “taken no responsibility for people using crypto currencies,” as people invest as their own risk.
Experts have also revealed that cryptocurrencies may see special regulations in the country, so as to comply with the country’s penal and anti-terrorism legislation. The Latvian government reportedly set up a workgroup that’s set to reveal legislative proposals in July.
The fintech sector is still in its infancy in the region, so the government is likely going to start catering to cryptocurrency startups, a move already made by other neighboring countries, such as Belarus.
Other countries are apparently just looking to cash in. Bulgaria, for example, has imposed a 10 percent capital gains tax on cryptocurrencies, although the country has no official stance towards cryptos.