Latvia Transfer Pricing Documentation Requirements
Latvia ties its Local File and Master File obligations to transaction value, with documentation filed within twelve months of year-end above EUR 5 million and prepared on request at lower levels. Penalties are geared to the value of the related-party transactions, subject to a cap of EUR 100,000.
Requirements at a glance
| Requirement | Threshold | Deadline | Deadline type | Language | Penalty |
|---|---|---|---|---|---|
Master File Required | Related-party transactions > EUR 15m, or revenue > EUR 50m with transactions > EUR 5m | 12 months after fiscal year-end (filed) / on request | Preparation deadline The documentation must exist by the date shown and is produced only when the tax authority requests it. Once requested, it must be provided within 30 days. | LV / EN | Yes (up to 1% of transactions, max EUR 100,000) |
Local File Required | Filed above EUR 5m of transactions; prepared on request between EUR 250,000 and EUR 5m | 12 months after fiscal year-end (filed) / on request | Preparation deadline The documentation must exist by the date shown and is produced only when the tax authority requests it. Once requested, it must be provided within 30 days. | LV | Yes (up to 1% of transactions, max EUR 100,000) |
CbC report Required | Group revenue ≥ EUR 750m | 12 months after fiscal year-end | Submission deadline The Country-by-Country report is filed by the group's ultimate parent entity; a local notification identifying the reporting entity is filed separately. | — | Yes |
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Scope of the documentation obligation
Latvia scales its obligation by transaction value, measured at the level of the standalone Latvian entity. The Master File must be prepared and submitted where related-party transactions exceed EUR 15 million, or where revenue exceeds EUR 50 million and related-party transactions exceed EUR 5 million. The Local File must be submitted within twelve months of year-end where transactions exceed EUR 5 million, and prepared within twelve months, to be produced on request, where related-party transactions are between EUR 250,000 and EUR 5 million. Documentation is produced within 30 days of a request.
Distinctive features of the Latvian regime
The defining feature of the Latvian regime is the graduated obligation that distinguishes between documentation that must be actively filed and documentation that must merely be prepared and held. Above EUR 5 million of transactions the Local File is filed within twelve months; between EUR 250,000 and EUR 5 million it is prepared within the same period but produced only on request, which separates the largest taxpayers from the mid-sized on the basis of how their documentation reaches the authority. Penalties are value-based, reaching up to 1 percent of the related-party transaction amount where the file is not submitted or its preparation requirements are substantially violated, capped at EUR 100,000. A safe harbour applies to low-value-adding intragroup services under the simplified OECD-based approach.
Benchmarking and comparables
Domestic comparables are preferred where available, although in practice foreign comparables are used in combination with domestic ones. Both single-year and multi-year analysis are acceptable, with the choice to be justified. A new benchmarking study must be prepared every year where cross-border controlled transactions exceed EUR 5 million; below that, between EUR 250,000 and EUR 5 million, a roll-forward of the comparables with a financial update is accepted. The tax authority may assess compliance with the arm’s length principle for five years after the annual financial statement is submitted.
Frequently asked questions
What is the difference between filing and preparing the Latvian Local File?
Above EUR 5 million of transactions the Local File is filed within twelve months of year-end. Between EUR 250,000 and EUR 5 million it is prepared within the same period but produced only on request, rather than filed.
This guide is an informational research aid prepared by Comp-Press and is not tax or legal advice. Transfer pricing rules change; verify current requirements before relying on them for filing.