In recent years, TP has become a key area of international taxation facing multinational enterprises and tax administrations.
TP requirements mainly apply to cross-border transactions. If a multinational group enters the Latvian market, e.g. by establishing, merging or acquiring a Latvian subsidiary or creating a permanent establishment (PE) in Latvia, and that subsidiary or PE makes transactions with other group companies (or with any other persons such as family members or significant individual shareholders), the prices applied in those transactions may directly affect how the profit or loss of related parties is measured, and it is important to disclose how those prices are set in practice.
So the transfer prices of a multinational group with a taxable presence in Latvia are governed by Latvian tax laws.
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