Data points
- Controlled transactions that trigger a master file[1]
- EUR 20m
- Controlled transactions that trigger a local file and the annual report[1]
- EUR 250,000
- Materiality threshold below which a transaction may be treated as not significant[1]
- EUR 90,000
- To produce the master file and local file once the tax authority asks[1]
- 30 days
- Cap on the documentation fine, charged at up to 1% of transaction value[3]
- EUR 100,000
- How far back a transfer pricing adjustment reaches[3]
- 5 years
Latvia rebuilt its documentation regime on 1 January 2026. Annual filing of the two files is gone, a new annual report takes its place, and every threshold moved.
The four facts to know:
- A master file is required once controlled transactions pass EUR 20 million in the reporting year.
- A local file is required once they pass EUR 250,000. An individual transaction up to EUR 90,000 a year may be treated as not significant.
- Both files are prepared within 12 months of year end and held, then produced within 30 days of a request. Only the controlled transactions report is filed every year.
- A late or seriously deficient file costs up to 1% of the controlled transaction value, capped at EUR 100,000.
What are Latvia's latest transfer pricing rules?
Latvia moved from annual filing to an on-request regime with a structured annual report in front of it. The change took force on 1 January 2026 and applies to controlled transactions from reporting years starting in 2025. The amendment was published in the official gazette on 21 November 2025[1], and the consolidated amending law[2] sits alongside it.
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| Item | Through 2025 | From 1 January 2026 | Source |
|---|---|---|---|
| Master file and local file | Annual filing for the largest taxpayers | On request only, within 30 days | Latvijas Vēstnesis |
| Annual electronic report | None | Controlled transactions report above EUR 250,000 | Latvijas Vēstnesis |
| Master file test | EUR 15,000,000 automatic filing tier | EUR 20,000,000 of controlled transactions | Latvijas Vēstnesis |
| Local file test | EUR 5,000,000 band | EUR 250,000 of controlled transactions | Latvijas Vēstnesis |
| Materiality | EUR 20,000 | EUR 90,000 | Latvijas Vēstnesis |
Whether Latvia formally incorporates the OECD transfer pricing guidelines is not confirmed, so this page states what the statute does rather than asserting incorporation. Latvia is an OECD and Inclusive Framework member.
Who needs transfer pricing documentation in Latvia?
A Latvian subsidiary or permanent establishment that transacts with related parties, once its controlled transactions clear the thresholds. Transactions with persons in low-tax or no-tax jurisdictions are caught as well.
The ownership percentage that makes two parties related is not confirmed from a primary source, so this page quotes none. The arm's length principle applies to every intercompany transaction in any case, including those below every documentation threshold.
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| Requirement | 2026 rule | Source |
|---|---|---|
| Master file threshold | Controlled transactions above EUR 20,000,000 in the reporting year | Latvijas Vēstnesis |
| Local file threshold | Controlled transactions above EUR 250,000 in the reporting year | Latvijas Vēstnesis |
| Materiality | An individual transaction up to EUR 90,000 may be treated as not significant | Latvijas Vēstnesis |
| Controlled transactions report | Filed electronically within 12 months of year end, above EUR 250,000 | Latvijas Vēstnesis |
| Language | Latvian or English, with a Latvian translation on request | State Revenue Service, Latvia |
| Penalty | Up to 1% of controlled transactions, capped at EUR 100,000 | State Revenue Service, Latvia |
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Do you need a master file in Latvia?
Only if controlled transactions exceed EUR 20,000,000 in the reporting year. The test is local transaction volume, not group size, so a large group with modest Latvian flows does not meet it. The file is prepared within 12 months of year end and produced within 30 days of a request, with no annual filing obligation at all.
The master file is a group document, usually prepared centrally by the parent. What the Latvian entity needs is the ability to produce that file inside 30 days, which makes access and version control a group responsibility rather than a local one.
Do you need a local file in Latvia?
Yes, once controlled transactions exceed EUR 250,000 in the reporting year. It is prepared within 12 months of year end and produced within 30 days of a request. An individual transaction up to EUR 90,000 a year may be treated as not significant.
That EUR 90,000 figure is a materiality threshold, not an opt-out, and it was raised from EUR 20,000 by the 2025 amendment. The file may be reviewed every three years where the facts affecting the pricing method are unchanged, but tested party and comparable financial data must be refreshed every year regardless.
What is Latvia's controlled transactions report?
A structured data form filed through the State Revenue Service electronic declaration system. It is required once controlled transactions exceed EUR 250,000 in the reporting year, and it is due within 12 months after the end of that year.
This is the only obligation that is actually filed every year. It replaces the annual master file and local file submission that applied to the largest taxpayers before 2026. The two files themselves are now produced only when asked for.
Does Latvia require country-by-country reporting?
Yes, as an OECD and Inclusive Framework member. The Latvian notification deadline, filing deadline and local threshold are not confirmed from a primary source, so this page does not state them as Latvian figures.
The international design is built around a consolidated group revenue test of EUR 750,000,000. Country by country reporting is a separate obligation from the master file and local file, with its own much higher threshold, and the two should not be read together.
When is Latvia transfer pricing documentation due?
Every date keys off 12 months after year end, plus the 30 day window once a request lands. For a 31 December 2025 year end, the controlled transactions report and the prepared files are both due by 31 December 2026.
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| Obligation | Deadline | Source |
|---|---|---|
| Controlled transactions report | Within 12 months after year end | Latvijas Vēstnesis |
| Master file and local file prepared | Within 12 months after year end | Latvijas Vēstnesis |
| Master file and local file on request | Within 30 days of a request | Latvijas Vēstnesis |
| Country by country notification | Not confirmed | Not confirmed |
| Country by country report | Not confirmed | Not confirmed |
What language must the documentation be in?
Global documentation may be prepared in Latvian or English, and the tax authority may require a Latvian translation on request. The local file is prepared in Latvian. All thresholds are set in euro, so a eurozone entity has no conversion step.
Holding an English group master file is fine. The practical risk is the translation obligation landing inside the same 30 day window as the file itself.
What are the penalties for getting Latvia transfer pricing wrong?
Late submission or a serious breach of the documentation rules carries a fine of up to 1% of the controlled transaction value, capped at EUR 100,000. The figure comes from State Revenue Service methodological guidance[3] last updated on 10 December 2024, and the 2025 amendment did not list that provision among the items it changed.
A transfer pricing adjustment also brings additional tax and late payment interest, and return corrections arising from one reach back five years. The fine scales with transaction value, so the exposure grows with exactly the flows that created the obligation. A 30 day production window also means "prepare and hold" has to mean genuinely prepared, not drafted after the request lands.
Can you get an advance pricing agreement in Latvia?
Yes, a unilateral one, for controlled transactions above EUR 1,430,000 a year. That figure comes from the 2018 amendment, and whether the 2025 amendment changed it is not confirmed, so treat it as the last confirmed rule rather than a verified 2026 number.
Bilateral and multilateral availability is not confirmed from a primary source, so this page does not assert it. For large recurring flows, an agreement is the way to take adjustment risk off the table before anyone examines the pricing.
How we help with Latvia transfer pricing
Latvia's new regime rewards one thing: a file that already exists when the request arrives, with the translation question already answered. We build the benchmarking and the functional analysis, draft the master file and the Latvian local file, and keep the annual controlled transactions report on the calendar. See how our transfer pricing software works.
Book a demo to map your Latvian documentation duties against the 2026 thresholds.
Official sources
3 sources
- 1.Latvijas Vēstnesis. Amendments to the Law On Taxes and Duties, published 21 November 2025
- 2.Latvijas Vēstnesis. Consolidated amending law on likumi.lv
- 3.State Revenue Service, Latvia. Transfer pricing methodological guidance (10 December 2024)
Article by
Logan Jackonis
Head of Services & Operations, Commenda
Logan leads Commenda’s Services and Operations team, helping controllers, heads of tax, and finance leaders navigate international expansion. He built a global expert network across 70 countries and previously worked in management consulting across the Middle East and Southeast Asia.
Disclaimer: Commenda and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.
