Taxand has launched its Global Transfer Pricing Guide 2026, its largest edition to date, bringing together transfer pricing guidance from 48 countries worldwide. COBALT contributes Baltic expertise to the publication through dedicated chapters on Estonia, Latvia and Lithuania, offering businesses a practical overview of the transfer pricing rules, compliance requirements and recent developments across all three Baltic jurisdictions.
The Guide is designed as a practical resource for multinational groups navigating an increasingly complex transfer pricing environment. Taxand notes that transfer pricing audits and court cases are on the rise, making robust and contemporaneous documentation increasingly important. The 2026 edition also introduces a new dedicated section on Financial Transactions, reflecting the growing relevance of intragroup loans, guarantees, cash pooling and other financing arrangements in transfer pricing practice.
The individual country chapters examine the applicable transfer pricing framework, accepted methodologies, documentation and reporting obligations, local benchmarking approaches, financial transactions, advance pricing agreements, audits, burden of proof and penalties. They also highlight local developments that businesses should take into account when reviewing their transfer pricing arrangements.
Estonia
The Estonia chapter highlights the particular interaction between transfer pricing and Estonia’s distinctive corporate income tax system. Unlike jurisdictions where corporate income tax is generally imposed on annual accrued profits, Estonia taxes profits primarily when they are distributed or when certain other taxable outflows occur. A non-arm’s-length transfer of value between related parties can therefore itself give rise to taxation as a deemed or hidden profit distribution.
The chapter also describes a more targeted approach to transfer pricing scrutiny by the Estonian Tax and Customs Board. Areas attracting particular attention include Estonian manufacturing entities, where the remuneration of the local entity is assessed against its functions and risks, and cash-pooling and other intragroup treasury arrangements. The chapter therefore emphasises the importance of documentation that accurately reflects both the pricing and the actual substance of the Estonian entity’s role within an international group.
Contributed by Partner Egon Talur, Managing Associate Tõnu Kolts and Specialist Counsel Karli Kütt.
Latvia
The Latvia chapter reflects significant recent changes to the country’s transfer pricing compliance framework. In addition to the established Master File, Local File and Country-by-Country reporting requirements, Latvia has introduced a separate Controlled Transactions Report (CTR) for reporting years beginning in 2025.
Taxpayers whose total value of relevant controlled transactions exceeds EUR 250,000 must submit the CTR electronically in a structured format within 12 months after the end of the reporting year. The report contains transaction-level information, including the transaction type and direction, value, counterparty, transfer pricing method, tested party, source of comparable data and selected arm’s-length indicator. The new requirement therefore adds an important reporting dimension to Latvia’s existing transfer pricing documentation framework.
The Latvian chapter also addresses intragroup financial transactions. In the case of related-party loans, for example, the analysis should extend beyond the interest rate and take into account the amount of financing as well as the broader terms and conditions of the arrangement. It also discusses the treatment of revolving credit facilities and cash-pooling arrangements and the information concerning group financing activities that should be reflected in the Master File.
Contributed by Partner Sandija Novicka and Senior Associate Arnolds Mikāns.
Lithuania
The Lithuania chapter provides guidance on the country’s transfer pricing documentation and reporting framework, benchmarking, financial transactions, audits, penalties and advance pricing agreement procedures.
Among the developments addressed in the 2026 edition are changes to Lithuania’s Advance Pricing Agreement (APA) framework. From 1 January 2026, APA procedures are governed by the Lithuanian Tax Administration Law and the tax authorities’ Order No. VA-81. The chapter notes that unilateral, bilateral and multilateral APAs are available and also sets out the compliance requirements applicable to decisions issued under the new rules.
Another important development is the Lithuanian tax authorities’ publication in 2026 of draft Q&A guidance for public consultation concerning transfer pricing documentation for controlled transactions and the construction of the arm’s-length range. According to the chapter, the draft guidance responds to common deficiencies identified by the authorities in practice and frequently raised taxpayer questions, with the aim of providing further practical guidance on documentation and determining an arm’s-length range.
Contributed by Partner Rokas Daugėla.
A practical resource for businesses operating across the Baltics
Taken together, the Estonia, Latvia and Lithuania chapters provide businesses with a practical view of both the similarities and the important differences between the three Baltic transfer pricing regimes. From Estonia’s distribution-based corporate income tax model and increased attention to intragroup financing, to Latvia’s new Controlled Transactions Report and Lithuania’s evolving APA and transfer pricing guidance, the chapters highlight the issues multinational groups should consider when managing their Baltic transfer pricing arrangements.
COBALT’s participation in the Guide reflects the firm’s integrated Baltic tax capability and its experience advising international and local businesses on transfer pricing planning, documentation, financial transactions, tax audits and disputes across Estonia, Latviaand Lithuania.
Read Taxand’s Global Transfer Pricing Guide 2026 and access the individual Estonia, Latvia and Lithuania chapters on Taxand’s website. Download the full edition here.
