3 ms·

This is done, but it's pretty easy to game by pricing parts 'unusually'. Especially when it is a subsidary of your own company producing the parts overseas, y

This is done, but it's pretty easy to game by pricing parts 'unusually'. Especially when it is a subsidary of your own company producing the parts overseas, you can decide if ECU control circuit boards are worth $1 or $1000. And you would be able to produce paperwork and find experts who would value it at either, or anywhere in the middle. (since there is no market price for highly specialist circuit boards which can't be sold to anyone else).

mindslight 3y ago
I'd say there's a hard floor for the cost of board components plus the labor/management of assembling them. But yes I can imagine fraud being generally rampant. It does make you think though, now that we've got such computation and communication capabilities - if creating and publishing such kinds of reports became mandatory, such that individual consumers could benefit from a lot more analysis on what they're buying rather than the mere final price.
gamblor956 3y ago
No, you can't. This is governed by transfer pricing laws. Tax authorities can and will assess penalties for behavior like that.
- londons_explore 3y ago
  > For tax purposes such transactions are treated by reference to the profit that would have arisen if the transactions had been carried out under comparable conditions by independent parties. [UK tax authority] And thats where the fact engine ECU's are useless to anyone else comes into it - their market value can be near nil.
  - gamblor956 3y ago
    There are almost a dozen different ways to determine profit, and the method that results in near nil value will not be accepted. Seriously, tech guys think they've found magical hacks in the law and don't realize that there are literally thousands of lawyers, accountants, and investors that found the loophole first, exploited it, and then moved on to the next loophole when the legislators closed the one they were using. The "exploit" you described was possible in the 00s. And it was closed over a decade ago.

mindslight 3y ago

I'd say there's a hard floor for the cost of board components plus the labor/management of assembling them. But yes I can imagine fraud being generally rampant. It does make you think though, now that we've got such computation and communication capabilities - if creating and publishing such kinds of reports became mandatory, such that individual consumers could benefit from a lot more analysis on what they're buying rather than the mere final price.

gamblor956 3y ago

No, you can't. This is governed by transfer pricing laws. Tax authorities can and will assess penalties for behavior like that.

londons_explore 3y ago
> For tax purposes such transactions are treated by reference to the profit that would have arisen if the transactions had been carried out under comparable conditions by independent parties. [UK tax authority] And thats where the fact engine ECU's are useless to anyone else comes into it - their market value can be near nil.
- gamblor956 3y ago
  There are almost a dozen different ways to determine profit, and the method that results in near nil value will not be accepted. Seriously, tech guys think they've found magical hacks in the law and don't realize that there are literally thousands of lawyers, accountants, and investors that found the loophole first, exploited it, and then moved on to the next loophole when the legislators closed the one they were using. The "exploit" you described was possible in the 00s. And it was closed over a decade ago.