Page 65 - Strategic Tax Planning for Global Commerce & Investment

Strategic Tax Planning for Global Commerce and Investment

Differences and Adjustments

The enterprises should adjust the differences between
uncontrolled transactions and the controlled transactions.
The differences could include the following items:

 Quantity of the product
 Contract terms

 Level of the market (wholesale or retail)
 Geographic market
 Date of transaction
 Intangible property attached to the product
 Foreign currency risks

Products Suitable for the CUP Method

Entities should consider using the CUP method for the following
product categories

 Extracted raw materials (gold, silver,
cooper, crude oil, gasoline, etc.)

 Harvested crops (wheat, corn, soybeans,
sugar, cotton, etc.)
 Animal products (cattle, pork bellies, etc.)
 Fungible chemicals (saccharin, ammonia,
fructose, etc.)

 Other fungible products without brand
name (pens, pencils, paper clips, computer
disks, etc.)
 Other fungible products with brand name
(contact lenses)

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