- 27 - changes that needed to be made to the concession agreements to ensure U.S. tax creditability. Nordberg specializes in international tax matters and assisted in the restructuring of the Indonesian production sharing agreement so that it resulted in a creditable tax. Amoco developed a proposal whereby the agreements would be amended to provide that Amoco Egypt would pay its Egyptian income taxes directly and by deleting all of the provisions relating to EGPC's payment of Amoco's Egyptian taxes on Amoco's behalf, including Article IV(f)(6) of the MCA. Amoco also proposed the use of a Petroleum Production Incentive Allowance (PPIA), which was a formula under which additional oil would be allocated to Amoco Egypt in order to allow it to pay its Egyptian taxes directly while keeping the net economic interests of Amoco Egypt and the ARE substantially unchanged. Amoco developed the PPIA because EGPC was not willing to alter the existing production split, see supra p. 20, to reflect a gross-up for the taxes to be paid directly by Amoco Egypt. EGPC found an increase in Amoco Egypt's production allowance more appealing for political purposes. Since under the PPIA approach, Article IV(f)(6) would be deleted, its meaning was unimportant to Amoco at this time in connection with the ruling request. In the course of developing the proposed changes in the MCA, it was understood by Amoco and its advisers that Article IV(f)(6)Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Next
Last modified: May 25, 2011