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 »
Cases where an employee works remotely from another country have become commonplace, but for companies, this flexibility can create a permanent establishment (Eng.: permanent establishment or “PE”) with all the resulting tax consequences. Recently, the Organisation for Economic Co-operation and Development (OECD) published new guidelines for assessing the risk of permanent establishment (PE) in cases
New guidelines for assessing tax risks when an employee works remotely from abroad 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 »
Transfer pricing often becomes relevant only when a company is suddenly asked for its justification or when the SRS sends a letter with questions about transactions with related parties. However, the law has long established when documentation is mandatory, when it must be submitted upon request, and when a simplified justification is sufficient. An important
When transfer pricing documentation becomes mandatory and what it means in practice Lasīt vairāk »
Yesterday, the Saeima passed amendments to Section 15.² of the Law “On Taxes and Duties” in the third reading, significantly changing the transfer pricing documentation procedure. Henceforth, companies engaging in transactions with related parties will be required to submit a controlled transaction report to the State Revenue Service. What is changing? Until now, companies could
New obligation for companies – controlled transaction report becomes mandatory 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
