When the SRS addresses related party loans, the central issue is almost always the interest rate. In practice, a seemingly simple approach is often used: to compare the loan interest rate with the average indicators published by the Bank of Latvia and, if it exceeds the “average”, to make tax adjustments. The Senate of the […]
For a long time, loans to board members, shareholders, and other related parties were perceived in business practice as a low-risk issue. They were not at the top of the State Revenue Service (SRS) priorities, and many companies concluded based on this: “if no one has asked anything so far, then everything is fine.” This
Loans to Board Members and Related Parties: A Risk Coming into Focus Lasīt vairāk »
REAL ESTATE AND CONSTRUCTION – The Law on Building Rights for Residential Rental Houses has been promulgated, according to which multi-apartment rental houses can be built on land owned by the state or municipality– Senate: Co-owners’ consent for construction work is not tied to a specific form of expression of will– Municipality’s duty to observe
Legislative Review February 12–19, 2026 Lasīt vairāk »
As of October 1, 2026, the procedure by which a thermal energy producer sells its produced thermal energy to a district heating system operator will change. These changes are included in the amendments to the Energy Law, which the Saeima supported on February 12 with a clearly defined objective: to address price fluctuations in the
When receiving a company’s documents for registration, the Register of Enterprises (UR) primarily verifies whether they formally comply with the requirements of regulatory enactments. Private agreements between shareholders (e.g., specific provisions on the sale of shares) are generally not evaluated by the UR; however, an assessment of the compliance of the provisions included in the
In transfer pricing matters, businesses are often convinced that the risk is theoretical or applies only to ‘very large’ or international companies. Practice shows otherwise. Often, the decisive factor is not the transaction volume or structural complexity, but how well the company is prepared to justify its prices when the SRS (State Revenue Service) asks
When the State Revenue Service (SRS) initiates a transfer pricing audit, entrepreneurs often expect a discussion regarding the documentation format or specific methodological nuances. However, in practice, the SRS focus is usually much more pragmatic – on whether the company’s financial results correspond to what an independent market participant would achieve under similar circumstances. If
Among entrepreneurs, the question “Why did the SRS come specifically to us?” is still frequently heard. This is often followed by the assumption that the audit is random or related to some formal error. In practice, this view is increasingly less aligned with reality. In the field of transfer pricing, the State Revenue Service (SRS)
In recent years, transfer pricing regulations in Latvia have undergone a quiet but significant transformation. While previously the tax administration often focused on the formal existence or absence of documentation, now the focus is increasingly shifting towards the economic substance of transactions and the figures that characterize them. With the new amendments to Section 15.²
There is a persistent belief among entrepreneurs that transfer pricing regulations primarily apply to international transactions, while transactions between Latvian companies are perceived as low-risk from the outset. Although there is some basis for this view, in practice it often leads to an incomplete understanding of the arm’s length principle and erroneous conclusions regarding the
