Transfer pricing

09.07.2019

Fellow subsidiaries as related parties in transfer pricing 1/28/19
Free access Tax Transfer pricing

Some of the substantial changes made to Latvia’s transfer pricing (TP) rules effective from 1 January 2018 prescribe how corporate income tax (CIT) payers should identify related parties before reporting and analysing their mutual transactions in their TP documentation. This article explores whether fellow subsidiaries are treated as related parties and offers a practical example of identifying this status.
17.05.2019

Benefit test in transfer pricing analysis (3/20/19)
Tax Transfer pricing
The benefit test is one of the key areas the State Revenue Service (SRS) will examine when reviewing intragroup services and assessing whether the costs of receiving such services are related to the taxpayer’s business. To prove that a benefit has been received from the service, it is important to take precautions for mitigating transfer pricing (TP) risks. The benefit test depends on facts and circumstances, so it is not possible to define intragroup services that are clearly treated as low or high value adding services. This article explores the benefit test and ways of checking whether a service has provided its recipient with any economic or commercial benefit.
12.04.2019

Transfer pricing trends: arm’s length level of debt (3/15/19)
Tax Transfer pricing
Following our series of articles on the OECD’s BEPS public discussion draft on financial transactions (the “Green Paper”) this article explores an arm’s length level of debt for transfer pricing (TP) purposes. Taxpayers are invited to evaluate whether interest charges on a loan made to a related party and the debt itself meet the arm’s length standard.
15.02.2019

Areas covered by voluntary transfer pricing risk reviews (2) (1/7/19)
Tax Transfer pricing

This article completes what we wrote last week.
08.02.2019

Issues covered by voluntary transfer pricing risk reviews (1) (1/6/19)
Tax CIT Transfer pricing
The State Revenue Service (SRS) has been implementing Voluntary Transfer Pricing Risk Review, a new control process they call a consulting audit. This process follows from a memorandum on the Advise First! principle signed by the business community and regulators on 15 June 2017 that provides for a customer-focused government.
14.12.2018

Different rules for assessing related-party transactions (2/50/18)
Tax Transfer pricing
This article offers an overview of assessing related-party transactions and disclosing information according to the new corporate income tax (CIT) payment regime and the revised transfer pricing (TP) documentation standard.
16.11.2018

Low value adding services: simplified transfer pricing approach (1/46/18)
Tax Transfer pricing
Proposals for amending articles 1 and 15.2 of the Taxes and Duties Act to lay down new transfer pricing (TP) rules were passed by Parliament in their third reading on 25 October 2018. This article explores a proposal presented by the State Revenue Service (SRS) for adopting best practice – a simplified approach to the arm’s length pricing of low value-adding intragroup services – aimed at easing the TP compliance burden on taxpayers.
22.10.2018

European Economic Interest Grouping: transfer pricing rules (3/42/18)
Tax CIT Transfer pricing VAT
Multinational enterprise groups engaged in frequent cross-border transactions seek to optimise the provision of services and to cut their costs, for example, by entering into a cost contribution arrangement or by setting up a separate legal entity to provide shared services. In this article, from a Latvian transfer pricing (TP) perspective we explore the European Economic Interest Grouping (EEIG), a type of legal entity that mainly aims to minimise the financial and legal burden by providing support to its business partners.
12.10.2018

OECD on transfer pricing of financial transactions (2) (2/41/18)
Tax Transfer pricing
This article wraps up our recent series on this topic.
21.09.2018

OECD on transfer pricing of financial transactions (3/38/18)
Tax Transfer pricing
One of the last missing pieces of the OECD’s BEPS project involves developing transfer pricing guidance on financial transactions. While the OECD had pushed back the publication several times, on 3 July 2018 they released a non-consensus discussion draft that sets out various approaches that may be appropriate for the topics covered, without giving explicit guidance. The public were invited to comment on the draft by 7 September 2018, while the report is to be finalised by April 2019. This article provides a brief summary of the draft.
20.07.2018

Controlled transactions and transfer pricing documentation for loans (3/29/18)
Tax Transfer pricing
This article explores the term “amount of controlled transactions” and the obscure requirement for transfer pricing (TP) documentation for intragroup loans, included in proposals for amending section 15.2 of the Taxes and Duties Act.
22.06.2018

Safe harbour rules in transfer pricing (2) (2/25/18)
Tax Transfer pricing
This article completes our series on this topic.
14.06.2018

Safe harbours in transfer pricing (3/24/18)
Tax Transfer pricing
The process of determining and administering arm’s length transfer pricing (TP) often takes a lot of effort, time and money. Safe harbour rules applicable in certain circumstances can ease some of those burdens and give the taxpayer more certainty.
08.06.2018

Advance pricing agreement with tax authorities (2/23/18)
Tax Transfer pricing

Nowadays more and more multinational enterprises decide to enter into an agreement with tax authorities for setting the price of a transaction between related parties in advance (Advance Pricing Agreement or APA). This article explores the Latvian practice of entering into an APA.
08.06.2018

Transfer pricing validation requirements to be relaxed (1) (1/23/18)
Tax Transfer pricing
This article provides an overview of alternative ways of obtaining market comparables, relaxed requirements for transfer pricing (TP) validation, and safe-harbour solutions recommended by the OECD guidelines, as well as their practical application in countries that have adopted such rules for TP analysis.
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21.06.2023

What should you think about if you want to move to Latvia?

Tax resident status prescribes a personal income tax (PIT) liability on your worldwide income in your tax residence country. You should carefully assess your tax resident status to avoid potential double taxation, if the tax authorities of two countries treat you as their tax resident.
17.03.2023

Nasdaq welcomes PwC as a certified adviser on First North

“By working closely with multiple executives and shareholders of both private and State-owned corporates, we have observed an increasing interest about the capital markets. Business leaders have become more ambitious and better aware of the myriad of benefits from attracting capital via the exchange. At PwC, we are confident that First North Certified Adviser status will allow us to provide a more diversified advice for our clients in the Baltic region and help navigate them in the journey of an intensified capital market activity,” highlights Raimonds Dauksts, Head of Advisory at PwC Latvia.

First North is a growth market designed for ambitious small and medium-sized companies in the Baltics. Being a Certified Adviser permits PwC to guide growth companies in Baltics through the Firth North application process and ensure they meet all the market’s requirements on a continuous basis.
07.03.2023

ESG reporting news - podcast 30 min (in Latvian)

Eiropas Parlaments pagājušā gada novembrī oficiāli apstiprināja Korporatīvās ilgtspējas ziņošanas direktīvu jeb CSRD (Corporate Sustainability Reporting Directive). Šobrīd Eiropas Savienības dalībvalstu, t.sk. Latvijas, rīcībā ir 18 mēneši, lai šo direktīvu pārņemtu savos tiesību aktos. Šādi iecerēts uzlabot pieejamās nefinanšu informācijas kvalitāti, nodrošinot uzņēmumu dažādo ietekmes pušu vajadzības un veicināt kopējo Eiropas pāreju uz ilgtspējīgāku ekonomiku.  

Šajā PwC Nodokļu podkāsta epizodē PwC Latvija ilgtspējas pakalpojumu vadītāja Maija Orbidāne skaidro, kādas ir šīs direktīvas prasības, kā tas ietekmēs uzņēmējus Latvijā un kādi ir laicīgi veicamie mājasdarbi šajā sakarā.
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