Starting with the 2025 tax year, companies in Latvia will no longer be required to submit transfer pricing documentation (Local File, Master File) to the tax authority on an annual basis. This comes with a “but” – a new transfer pricing disclosure form will be introduced.

No mandatory submission as of FY2025

Since 2018, Latvia has had a mandatory submission obligation for transfer pricing documentation (Local File, Master File) to the tax authority, upon meeting certain thresholds for inter-company transactions (for LF – EUR 5 million; for MF – EUR 15 million). However, starting with FY 2025, transfer pricing documentation will have to be submitted to the Latvian tax authority only upon request within 30 days. Overall, this is a big relief for multinationals facing tight deadlines and hefty fines for late submissions.

NEW: Transfer pricing disclosure form

However, it was decided to replace the collection of numerous transfer pricing documentation from taxpayers with a standardised and brief “controlled transactions form”. Such a practice is widely in use and understood by taxpayers in several other countries, and in my opinion, the approach seems viable to adopt in Latvia as well, rooted in internationally accepted practices. Ultimately, for the first level of risk assessment, only the core information should be sufficient. Moreover, a similar approach was taken in Latvia prior to 2018, when taxpayers were required to disclose brief information on the volumes of inter-company transactions and the transfer pricing methodology used in their annual CIT return appendix. The idea itself is not entirely new, but it may seem quite burdensome to some taxpayers.

The reason why the new transfer pricing disclosure form may cause question marks is that the form itself has not been released yet, although the law already says that the information to be disclosed will be:

  • Transaction type, direction, volume and transaction party;
  • Transfer pricing method;
  • Source of comparable transactions, tested party, selected profit level indicator (PLI) information on pricing.

For many finance teams unfamiliar with OECD TP terminology, completing this information can be challenging.

Tip: Don’t wait until year-end—make sure your transfer pricing is in order throughout FY2025 to avoid surprises later. Simply call or message a transfer pricing professional and make any necessary adjustments before the 2025 books are closed.

Benchmarking study updates

Bonus: Benchmarking studies now need full refresh every 3 years, with annual financial updates—finally clarified and aligned with global standards. Previously the law was not that clear on the periodic updates, but now this is fixed.

From 2026 onwards, here’s what applies:

  • Transfer pricing disclosure form: submit within 12 months after year-end if intercompany transactions exceed EUR 250k
  • Local File: prepare within 12 months if transactions exceed EUR 250k (submit within 30 days upon request)
  • Master File: prepare within 12 months if transactions exceed EUR 20m (submit within 30 days upon request)

Bottom line: Less paperwork, but don’t underestimate the new disclosure requirements. If you’re unsure about your transfer pricing setup for 2025, consider consulting a transfer pricing professional early.