Latvia: Penalty for non-compliant transfer pricing documentation
Penalty for failure to comply with transfer pricing documentation requirements
Penalty for failure to comply with transfer pricing documentation requirements
The tax authority may impose a penalty for failure to comply with the transfer pricing documentation requirements—in an amount up to 1% of the value of the controlled transaction, capped at €100,000.
KPMG observation
The tax authority has imposed such a penalty on a taxpayer who filed transfer pricing documentation relying on outdated analysis and failed to fully resolve the deficiencies after several reminders and instructions by the tax authority.
Note that the 1% penalty may be imposed regardless of whether the taxpayer’s transfer prices were arm’s length. This administrative penalty can be imposed for non-compliant transfer pricing documentation or the failure to submit it to the tax authority in time.
Read a December 2022 report prepared by the KPMG member firm in Latvia
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