Latvia has overhauled its transfer pricing compliance framework from 2026, introducing a new Controlled Transactions Report that requires companies with significant cross-border related-party transactions to submit a standardised summary of their pricing arrangements to support more targeted and efficient tax risk assessments.

RF Report

Latvia has significantly reshaped its transfer pricing compliance framework from 1 January 2026, following amendments to the Law “On Taxes and Fees” adopted at the end of 2025. The changes are designed to modernise reporting requirements, reduce administrative burdens for taxpayers, and enable the State Revenue Service (SRS) to carry out more targeted and efficient risk analysis.

At the centre of these reforms is the introduction of the Controlled Transactions Report (CTR), a new standardised reporting obligation for companies engaged in material related-party transactions with non-resident affiliates.

Who must file and when

Companies whose total transactions with related non-resident parties exceed EUR 250,000 in the preceding financial year will be required to submit a CTR to the SRS. Although the rules take effect from 1 January 2026, the reporting obligation already applies to the 2025 financial year.

The CTR must be submitted within 12 months after the end of the financial year, meaning the filing deadline for 2025 will be 31 December 2026. Reports will be filed electronically through the SRS Electronic Declaration System (EDS).

Failure to submit the CTR within 30 days of an SRS request may trigger penalties of up to 1% of the transaction value, capped at EUR 100,000.

What the CTR includes

The CTR is not a replacement for transfer pricing documentation. Instead, it is a structured summary of a company’s most significant controlled transactions. It captures key data points such as:

  • The nature and direction of the transaction
  • Transaction value and counterparty details
  • The transfer pricing method applied
  • Comparable data used
  • The financial outcome of the pricing analysis.

The following outlines the reporting requirements applicable for periods before and from the 2025 reporting year onward.

Category Scenario A Scenario B
Master File and/or Local File Documentation Must be prepared within 12 months if transaction value exceeds EUR 5,000,000. Documentation provided only upon request of the SRS, within 30 days.
Mandatory Submission of CTR via SRS EDS No Yes, within 12 months if the total value of controlled transactions exceeds EUR 250,000.
Materiality Threshold Transactions exceeding EUR 20,000. Transactions exceeding EUR 90,000.
Comparable Data Study Annually, if the transaction value exceeds EUR 5,000,000. New study once every 3 years (with annual financial data updates: roll-forward approach).
Penalties – Penalty of up to 1% of the value of controlled transactions (capped at EUR 100,000).