Does the new form apply to you?
Obligation to prepare the KDP
Transactions and transaction groups to include, available exemptions and thresholds. We assess how the legislative requirements affect your KDP obligation.
Transfer pricing update 2026
The new controlled transactions report in EDS: are you ready?
We help you assess the obligation, prepare the data and file the report without unnecessary risk.
Does the new form apply to you?
We quickly assess the obligation and the thresholds.
The EDS report without delays
We organise the data and complete the form.
Fewer errors, fewer VID questions
We check consistency with your transfer pricing documentation.
Big-firm expertise without borders. Boutique accountability. AI enabled. Expert judgement.
- Advisory
- Local Files
- Benchmarking
- Financial transactions
- TP policies
- Audit defence
Self-check
Do you need to file the controlled transactions report?
Answer four questions to find out whether you are required to file the controlled transactions report (KDP) and by when.
The result is indicative and does not replace a professional assessment. If in doubt, let's assess it together.
How we help
Support in preparing the controlled transactions report
If your company transacts with related parties, the new KDP form changes how those transactions are reported to VID. The obligation, the transactions to include and the level of detail depend on your revenue, transaction volumes and counterparties. Getting it wrong invites questions. Getting it right starts with knowing exactly what applies to you.
Information to include in the KDP
Pricing analysis of controlled transactions
We evaluate whether your transaction pricing is defensible, reducing the risk of errors and follow-up questions from VID.
Completing the KDP
Preparing the disclosure data set
We prepare the information to be disclosed in the KDP, consistent with your transfer pricing documentation.
Communication with VID about the KDP
Assessing requests, preparing responses
We help you evaluate VID information requests and prepare well-founded answers about your KDP.
New types of controlled transactions
Assessing the impact
We provide an opinion on transaction pricing and its effect on the KDP disclosure before you commit to the transaction.
Are you ready for the new report?
Book a short call. Within 30 minutes we will tell you whether the obligation applies and what it takes to be ready.
Book a callTrust, competence, and results
100+ Transfer pricing and tax projects
15+ Years of experience each team member brings to the table
30+ Countries where we have prepared transfer pricing documentation
Backed by the Merhels team, an independent audit and tax practice in Riga since 1998, with projects delivered by experienced specialists and a dedicated transfer pricing focus.
Kaspars Banders
Led by a former Big 4 head of transfer pricing
Kaspars Banders joined Merhels as Partner for Transfer Pricing and Tax after leading the transfer pricing practice at KPMG Latvia. FCCA, 16+ years in the field, with engagements across more than 20 jurisdictions.
Kaspars specialises in planning transfer pricing policies and their application within groups of companies. Since 2010 he has advised local and multinational enterprises across industries, with projects spanning more than 20 jurisdictions at once.
He has prepared transfer pricing documentation and methodologies for large multinational groups, conducted a wide range of comparability analyses, and successfully concluded Advance Pricing Arrangements and Mutual Agreement Procedures. Kaspars contributes to the development of the transfer pricing regulatory landscape, resolves transfer pricing disputes with tax authorities, represents clients in court and prepares expert opinions.
Professional BSc in Finance and qualification of Financier (BA School of Business and Finance). Member of the Association of Chartered Certified Accountants (FCCA), all exams passed first time.
"Let's make complex tax and transfer pricing challenges simple and effective." Kaspars Banders, Partner, Transfer Pricing & Tax. Formerly head of transfer pricing at KPMG Latvia.
FAQ
Frequently asked questions
Who has to file the controlled transactions report?
Companies whose controlled transactions with related foreign companies, related natural persons or persons in low-tax territories exceed EUR 250,000 in total in the reporting year. The report covers individual transactions or transaction categories whose annual value exceeds EUR 90,000. Transactions with related Latvian legal entities are not included. For a quick answer, use the self-check on this page.
How does the KDP relate to transfer pricing documentation?
The KDP discloses your controlled transactions to VID in a structured form, and VID can compare it against your transfer pricing documentation. Inconsistencies between the two are the fastest route to questions, so we always check the linkage before filing.
What happens if the report contains errors?
Errors or gaps increase the likelihood of VID information requests and, in the worst case, a transfer pricing audit. Careful preparation of the data set and a pricing sanity check before filing materially reduce that risk.
We have never prepared transfer pricing documentation. Where do we start?
Start with an applicability assessment: which obligations (documentation and the KDP) apply to your company at all. From there we prioritise what needs to exist before the filing deadline and prepare it in the right order.
Can you deal with VID on our behalf?
Yes. We help evaluate VID requests, prepare responses about the KDP and support you through any follow-up, drawing on decades of experience in tax dispute support.
When and where does the KDP have to be filed?
In VID's Electronic Declaration System (EDS), within 12 months after the end of the reporting year. If your financial year matches the calendar year, the first report, for 2025, is due by 31 December 2026. We recommend preparing it before the annual report is filed: issues found during preparation can still be corrected in the annual report and CIT return without late-payment charges.
What are the sanctions for not filing the KDP or filing it with errors?
For missing the filing deadline or materially breaching the preparation requirements, VID may impose a fine of up to 1% of the controlled transaction amount, capped at EUR 100,000. By filing the report, the company certifies that the information provided is complete and true.
Does the benchmarking study have to be refreshed every year?
If there have been no material changes in the company's operations, a full benchmarking study is required only once every three years, with financial data updated annually. The materiality threshold for transactions to analyse has been raised from EUR 20,000 to EUR 90,000, which reduces the scope of analysis for many companies.
KDP at a glance
The numbers and deadlines to know
The amendments to the law "On Taxes and Duties" (Section 15.2) took effect on 1 January 2026 and apply to controlled transactions starting with the reporting year that began during 2025.
EUR 250,000 Total annual value of controlled transactions above which the KDP must be filed
EUR 90,000 Materiality threshold per individual transaction or transaction category (previously EUR 20,000)
12 months Filing window after the reporting year ends. The first report, for 2025, is due by 31.12.2026
Up to 1% Fine on the controlled transaction amount for deadline or preparation breaches, capped at EUR 100,000
Every 3 years A full benchmarking study when there are no material changes in the business. Financial data is refreshed annually
EDS Filed in VID's Electronic Declaration System as a structured form with built-in classifiers
VID guidance on completing the KDP
A summary of the interpretation VID has given in meetings to practical questions about completing the KDP.
Can you skip filing the KDP if the total exceeds EUR 250,000 but no individual transaction exceeds EUR 90,000?
If the value of each individual transaction does not exceed EUR 90,000, the taxpayer is entitled to treat them as immaterial and leave them out of the KDP. In that situation the KDP does not have to be prepared or filed.
How should the KDP be completed if a Latvian company buys raw materials from its parent and later sells finished goods back to the same partner?
Each transaction has to be separated precisely. Both transactions should be reported in the KDP separately: the purchase of raw materials and the sale of production.
What if the comparability analysis covers several transactions with different partners together (portfolio approach)?
In the KDP, each transaction with the relevant group company must be reported as a separate entry with its own partner, even if they all share the same arm's length range and applied indicator.
Should the arm's length range be reported as quartiles or as the minimum and maximum?
The KDP reports the information analysed in the local documentation. If quartiles were used, report the 1st and 3rd quartile. If the minimum and maximum were used, report those. The years used in the analysis do not have to be stated.
How do you report transactions such as share deals or assignments where the price was set by expert valuation?
Latvia recognises only five primary methods. In the KDP you may select "Other" as the transaction type, but the method must be one of the five primary methods that best matches the analysis used. If a combination of methods is used, report the principal one.
How does the debtor reflect an assignment (cession) transaction in the KDP?
The debtor does not report the assignment itself. It reports the original transaction that created the debt. The new agreement with the assignee is reported only if it sets new loan terms.
How do you report a setup where the Latvian company acts as a goods agent or warehousing provider but records the value of the goods in its books?
The agent or service provider is remunerated for its own activity, so the local transfer pricing documentation analyses the agency or service transaction. In the KDP it can be reported under the transaction type "Service".
What goes in the "tested party" field if the method used does not require one?
EDS does not allow the field to be left empty, so one of the parties to the transaction has to be selected. For example, in loan transactions the borrower's overall financial result is not tested, but the borrower is still entered as the tested party.
News
News and publications
Our experts publish regularly on iFinanses about transfer pricing and related-party transactions.
Article
The controlled transactions report: what VID will see and conclude from it
Amendments introducing the controlled transactions report took effect on 1 January 2026. The article explains what data VID will receive, how it will analyse it and which common transfer pricing mistakes the report will expose.
Read the full article on iFinansesHandbook
Transfer pricing documentation templates: Local File
An iFinanses handbook prepared by our experts, with Local File templates and commentary.
View the handbookHandbook
Transfer pricing documentation templates: Master File
An iFinanses handbook prepared by our experts, with Master File templates and commentary.
View the handbookAll our articles in the iFinanses section on related parties
Are you ready for the new report?
Book a short call. Within 30 minutes we will tell you whether the obligation applies and what it takes to be ready.