Revisiting the CUP method in transfer pricing: global challenges and insights from an SLR

Kartika Putri Kumalasari, Eko Ganis Sukoharsono, Lilik Purwanti and Roekhudin

Cogent Business & Management, 2025, vol. 12, issue 1, 2570884

Abstract: More than 70% of international trade occurs within multinational groups, making transfer pricing a critical global issue. The Comparable Uncontrolled Price (CUP) method is widely regarded as the most direct reflection of the arm’s length principle, yet its application faces major barriers, including limited data availability, transaction complexity, and cross-jurisdictional legal uncertainty. This study seeks to (1) identify recurring problems in the implementation of CUP, (2) classify operational obstacles encountered by multinational enterprises, and (3) evaluate the effectiveness and efficiency of CUP across jurisdictions, particularly from the OECD versus UN perspectives and in developed versus developing countries. A systematic literature review using PRISMA (2015–2025) sourced data from Scopus and Web of Science, screened via Parsifal, quality-assessed with MMAT 2018, and coded in NVivo 14. Of 233 records, 48 met inclusion criteria, mostly qualitative (83.7%). Results reveal persistent data scarcity, intangible valuation problems, and regulatory divergence causing double disputes. The OECD emphasizes strict comparability and legal certainty, whereas the UN supports flexibility for developing economies. This study develops a taxonomy of CUP barriers and a multidimensional framework integrating legal certainty, administrative efficiency, transparency, and value alignment toward global fiscal justice. Findings underscore that CUP is effective only in strong institutional ecosystems and highlight the need to integrate OECD standards with UN adaptability to promote global fiscal justice.

Date: 2025
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DOI: 10.1080/23311975.2025.2570884

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