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
In recent years, transfer pricing regulation in Latvia has gradually shifted away from formal document checks toward evaluating the economic substance of transactions. Recent amendments to Section 15.² of the Law on Taxes and Duties clearly reinforce this direction: the State Revenue Service (SRS) will receive structured information regarding transactions with related parties, which the
Controlled Transaction Reports in Practice: 4 Errors the SRS Will Spot First Lasīt vairāk »
Companies often believe that transfer pricing does not apply to them, as it is only applicable to large multinational corporations. However, in reality, transfer pricing affects significantly more companies than it might initially seem. Transfer prices are the prices at which related companies trade with each other. Transfer pricing regulation exists at the level of
What are transfer prices and which companies do they apply to? Lasīt vairāk »
Transfer pricing has long affected not only international groups but also local companies. They have become a daily reality for Latvian businesses, especially in cases where a company cooperates with related parties: subsidiaries, board members, ultimate beneficial owners, relatives of officials, or foreign partners belonging to the same group. The arm’s length principle is one
Why must the price comply with the arm’s length principle? Lasīt vairāk »
The draft law, which intends to supplement Section 15.2 of the Law “On Taxes and Duties” with a new Paragraph 9¹, is currently being considered in the second reading by the Saeima. Given the current pace of progress and the support of the responsible Budget and Finance (Tax) Committee, the adoption of these changes is
