What Is Cup Method

The CUP method compares the price charged for property or services transferred in a controlled transaction to the price charged for property or services transferred in a comparable uncontrolled transaction in comparable circumstances.

What is cup method in transfer pricing?

The comparable uncontrolled price (CUP) method is one of the five main transfer pricing methods. It’s used to ensure transactions between related companies are comparable in price to those conducted with unrelated organizations. … The CUP method is a traditional transaction method.

What is comparable profits method?

The comparable profits method evaluates whether the amount charged in a controlled transaction is arm’s length based on objective measures of profitability (profit level indicators) derived from uncontrolled taxpayers that engage in similar business activities under similar circumstances.