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wholly owned Netherlands Antilles subsidiary of a domestic parent
of a controlled group of corporations sold bonds to foreign
persons in public offerings outside the United States, (2) the
Netherlands Antilles subsidiary lent the proceeds of the bond
sale to a wholly owned domestic subsidiary of that parent, and
(3) the Netherlands Antilles subsidiary was a conduit for the
passage of interest payments by that domestic subsidiary to the
foreign bondholders, those interest payments were not exempt from
U.S. taxation under the U.S.-Netherlands treaty as extended to
the Netherlands Antilles.
With respect to petitioner's contention that the interest at
issue in the Horbury transaction is exempt from U.S. taxation
under article VIII(1) because the express provisions of that
article have been satisfied, it is respondent's position that
petitioner has not satisfied his burden of proving that that
interest is so exempt. To support that position, respondent
relies on the substance over form doctrine and related princi-
ples, which this Court applied in Aiken Indus., Inc. v. Commis-
sioner, 56 T.C. at 933-934. Although respondent concedes that a
loan, in fact, was made to BOT in the Horbury transaction, she
contends that, in substance, Pioneer, rather than Horbury, was
the lender and the interest paid by BOT was paid to Pioneer, and
not to Horbury.
With respect to petitioner's contention that the interest at
issue in the Horbury transaction is exempt from U.S. taxation
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