This study examines transfer pricing taxation in Japan with a focus on the use of comparable uncontrolled transactions (CUP) and the adjustment of differences. While the OECD Transfer Pricing Guidelines (2017) and Japan’s 2011 reform introducing the “best method rule” have provided a clearer framework, practical challenges remain in securing true comparable and conducting reliable adjustments. To address this issue, the paper analyses the Brazil Honda case, structuring the discussion around key issues, legal reasoning, and judicial conclusions. The case illustrates how factors such as government regulation, market conditions, and location savings influence comparability and the determination of the arm’s length price. The findings highlight the necessity of rigorous comparability analysis to ensure fairness and predictability in taxation. This study contributes by bridging the gap between institutional principles and practical implementation, offering implications for policymakers, tax authorities, and multinational enterprises.