New obligation for companies – controlled transaction report becomes mandatory

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 prepare and keep transfer pricing documentation on-site, submitting it only upon request from the SRS. This approach will no longer be possible.

If the total amount of a company’s controlled transactions exceeds €250,000 per year, it must submit a structured “controlled transaction report” to the SRS within 12 months after the end of the reporting year.

The report must specify:

1. the type, direction, and total amount of each transaction;
2. the transfer pricing method used;
3. the comparable data used and the tested party.

Thresholds and deadlines

1. Controlled transaction report – mandatory if the total amount of controlled transactions exceeds €250,000 per year.
2. The threshold for Master File documentation has been increased to €20 million.
3. The threshold for insignificant transactions, below which transactions do not need to be included in transfer pricing documentation, has been increased from €20,000 to €90,000.
4. Documentation updates – once every three years, although financial data and tested party indicators must be updated annually.

What does this mean in practice?

The new obligation changes the current approach. It will no longer be sufficient for transfer pricing documentation to simply “be prepared” – it must be submitted to the SRS in a structured format.

This means that:

1. companies will need to regularly prepare and update transfer pricing data;
2. the SRS will be able to compare this data automatically, thereby identifying cases where prices deviate from market levels much faster.

This is a clear transition to the era of data analytics in transfer pricing – the SRS will no longer need to request documents, as the information will already be in their systems.

When do the amendments come into force?

The new procedure comes into force on January 1, 2026.
However, the law stipulates that these amendments will apply to controlled transactions conducted starting from the reporting year beginning within the 2025 calendar year.

Summary

1. Controlled transaction report – mandatory submission via EDS if the transaction volume exceeds €250,000.
2. The threshold for insignificant transactions has been increased to €90,000.
3. Data is structured and comparable, allowing the SRS to assess market prices automatically.
4. The new procedure applies from the 2025 reporting year, coming into force on January 1, 2026.