How to make sure your transfer pricing documentation is valid

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When examining the transfer pricing (TP) documentation of our statutory audit clients, we have noticed that companies often believe that their TP documentation file, whether generated at group level or prepared by an external service provider or the company itself, is sufficient to prove that its related-party transactions are arm’s length during a TP audit conducted by the State Revenue Service (SRS). When analysing our clients’ TP documentation as part of a statutory audit, we often find shortcomings that may lead to additional taxes being charged. Our experience suggests that our statutory audit clients appreciate our TP risk analysis.
Centralised TP documentation
To save costs, companies often generate their TP documentation at group level, either involving an external service provider or using their in-house resources. With TP documentation generated at group level, it is important to note that while many countries have similar TP requirements, a centrally prepared TP documentation file might not be sufficient for use in Latvia because of certain differences. The external service provider engaged for this purpose often lacks experience of preparing an analysis of complex transactions, and so the TP documentation file has significant shortcomings posing the risk that the SRS will reject it (this also applies where the TP documentation file has been prepared by the company).
A transfer pricing position review
A TP position review prepared by PwC will give you –
  1. an independent assessment and assurance that your TP documentation meets Latvian TP requirements;
  2. information about any material risks identified in your TP documentation; and
  3. recommendations for mitigating risks with preventive measures.
PwC will prepare a TP position review in the form of a report that analyses your TP documentation as a whole and assesses specific risks inherent in each transaction as follows:


Risk level

Immaterial, but it is advisable to improve this chapter so that it complies with generally accepted practice

No risk

Low to medium risk

High risk (a high probability of additional taxes being charged)

Varying levels of risk (depending on further information that is not available from your TP documentation file)


If your company already has a TP documentation file and you are interested in a TP position review, please feel free to contact PwC transfer pricing experts Tatjana Koncevaja ( or Inguna Jastrezemska (


Tatjana Koncevaja
Tel: +371 67094400
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