Virtual currency is also known as cryptocurrency, and each of it has its own name such as Bitcoin, Ethereum, Litecoin, Zcash). Cryptocurrency is visible money on your device but It’s not possible to touch it.
The State Revenue Service (SRS) of Latvia has published a new informative material on personal income tax (PIT) on the income from the sale of virtual currency.
If a person gets a virtual currency within the framework of an economic activity or generates a virtual currency, such income is classified as income from economic activities and it’s necessary to pay personal income tax.
If the revenue from the sale of virtual currency would be classified as income from capital gains, the tax will be 20%. The value of the virtual currency is equal to the value for which the person purchased the virtual currency.
The price of a virtual currency is the same as the price person paid in cash or a natural value.
A resident of Latvia shall submit to the SRS a declaration of income from capital gains on the disposal of virtual currency.
A non-resident is not obliged to submit a SRS declaration of income from capital gains or annual income statements if the payer of the income was withheld tax during act of payment.
Government of Latvia try to keep finger on a pulse, because of fast changes in the digital world. Cryptocurrency isn't something undefined anymore.
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